More of the same for markets this week with the Fed, China and US earnings to set the tone.
For that reason the Fed’s post-meeting statement early Thursday, and then the two surveys of Chinese manufacturing activity a few hours later, will make a potentially very volatile day of trading.
Earnings reports and updates here and offshore will not have much impact because of the way investors of all shapes and sizes remain fixated on what the Fed says and does, as well as the way China’s economy is slowing.
After Wall Street’s weak end on Saturday morning, our market will start trading today all but flat – the Share Price future Index rose 9 points to 5,016 early Saturday, compared with the earlier finish in Sydney for the physical market of 5,042.
The dollar finished around 92.58 USc, up from the 91.72 USc finish a week earlier.
US oil prices ended slightly weaker at $US104.49, while Brent lost 48c to $US107.17. US oil futures lost 3% for the week, the first weekly fall in five.
Comex gold futures fell to $US1334.30 per ounce In New York in after hours trading but still rose 2.2% for the week.
Japan’s stock market was hammered on Friday with news of a positive inflation rate for June (but flat on a month-on-month basis).
The Nikkei slid 3% on Friday and 3.2% for the week.
With more data out tomorrow on the economy, market sentiment in Tokyo might not be as upbeat as it seemed before the upper house poll a week ago yesterday.
The strong win in that poll by the government opens the way to some significant policy changes in coming months, and that seems to have knocked market confidence.
A possible increase in the country’s value added tax is the biggest worry, but the higher revenue is needed to reassure bond market investors at home and offshore that the government is serious about starting to tackle the country’s ridiculously high budget deficit and the national debt.
China’s Shanghai Composite lost 0.5%, but Hong Kong’s Hang Seng Index was up 0.3% and South Korea’s Kospi was up 0.1%.
For the week though both China and Hong kong markets had nice gains of 1.12% and 2.6% respectively.
Another key China market indicator in Hong Kong – the China Enterprises Index of the top Chinese listings in Hong Kong ended around 3.2% higher, its best weekly showing in almost three months.
In some respects there seems to be less concern now among Chinese investors about the health of the economy than investors in countries such as Australia.
In Australia on Friday the 0.1% (5.5 points) rise for the ASX 200 and the 1.4% for the week was just about what the week deserved.
ASX200 Since June 1 – Australian Shares Starting To Look Up?
Bank shares ended the week on a strong note with Westpac adding 46c, or 1.5%, to $30.52. The National Australia Bank rose 13c to $31.00, ANZ added 29c to $29.41 and Commonwealth Bank also rose 13c to $73.65.
For the week the CBA rose 3%, Westpac, 4.3%, the ANZ, 2% (closing at $29.41) and the NAB was up 2.2%.
But Macquarie Group fell $1.64 lower to $43.01, its second day of falls after its forecast of profit growth failed to meet analyst expectations on Thursday.
Macquarie shares lost nearly 2.4% over the week.
In the resources BHP Billiton dropped 17c to $34.60, Rio Tinto shed 26c to $57.24 and Fortescue Metal Group lost 4c to end on $3.61.
For the week though BHP added 2.2%, Rio, 1.8%, and gold miner Newcrest rose 11% thanks to the rise in gold prices and the better than expected reception for the 4th quarter production report and forecast for 2014 financial year.
