After the share price futures trading over the weekend, our market will start steady to slightly higher this morning as it seeks to extend the biggest bull run for 15 years.
That was after Wall Street was hit by the US jobs express on Friday night our time with close to half a million new jobs reported for January, and extra jobs for December and November were reported in a new round of revisions.
The strength of the jobs report have increased the chances of a rate rise mid year from the US Federal Reserve.
The jobs news knocked markets in Europe and the US lower, offsetting the positive impact of another week of sharp rise in oil prices.
It was a negative end for a week around the world, which saw most markets rise (except Japan and Chinese bourses) with gains helped by better US earnings reports, the strong rise in oil prices, better Eurozone data and the interest rate cut in Australia (which impacted our market, of course).
US shares rose 3%, European shares rose 1.5%, but Japanese shares lost 0.2% and Chinese shares remained in correction mode falling 4.2%.
Australian shares surged 4.2% last week.
On Saturday morning, the share prices futures contract closed with a loss of around five points at the end of the strongest 12 days for the local market since the ASX 200 started 15 years ago.
The ASX200 index rose 9.2 points, or 0.2% on Friday to end on 5820.2, while the All Ords also added 9.2 points, or 0.2%, to 5774.7.
The 12 day rally has added around $150 billion to the value of the local market’s value, fuelled by global and local monetary easing, and despite the weak performances of key commodities such as oil and iron ore.
The ASX200 rose 4.15% last week, and is up 7.6% since the beginning of the year, one of the world’s best sharemarket performances and on par with the solid rebound being experienced in the eurozone.
Driving the local rally has been the performance of the big banks: the ANZ and CBA eased on Friday, while Westpac rose 1.4% to a new all-time high and NAB added 0.6% to a fresh seven-year high.
Over the week CBA shares rose 4% to $92.98 (after topping $93 during the week), Westpac shares jumped 7.3% to $36.96 with a new CEO aboard for his first week in the job, ANZ shares jumped 5.8% to $34.90, and NAB shares were up 4.4% to $37.21.
Despite a 4% fall in the spot iron ore price to just over $US62, the prices of the major miners rose strongly last week.
BHP Billiton shares jumped to $31.55, Rio Tinto was up 5.3% to $60.60 and Fortescue Metals shares jumped 7.6% to $2.54.
Telstra Corp shares rose just 1.4% to end the week at $6.59.
Woolworths added 2.4% to $32.54, while Wesfarmers shares ended up 2.7% at $44.77.
The AMP’s Chief Economist Dr Shane Oliver wrote on the weekend, “Australian shares have been a star performer, having surpassed my (too optimistic) target for last year and my target for this year to now be up 7.6% year to date, which is up there with European shares.
“Clearly the combination of lower interest rates boosting yield plays, the lower $A boosting earnings and a stabilisation in oil and commodity prices helping resources stocks are having a big impact.
"Uncertainties associated with the impact on energy producers from the plunge in oil prices, negotiations with Greece and the Fed’s move towards a rate hike could result in a volatile first half in share markets with the risk of a 10-15% correction at some point along the way.
“While Australian shares are now looking a bit overbought in the short term (with the forward PE pushing above 15 times compared to a long term average around 14 times) and could see a correction or consolidation, the broad trend is likely to remain up,” Dr Oliver cautioned.
On Wall Street, the S&P 500, which slid 0.3% on Friday, ended the week up 2.9% for the week at 2,055.51, its best weekly performance in seven weeks.
The Dow rose 3.6% over the week to 17,823.97 while the Nasdaq Composite ended the week up 2.1% to 4,744.40.
