Falls all round on global markets last week after a mixture of closing sessions on Friday.
US shares fell 2.2%, Eurozone shares fell 1.3%, Japanese shares lost 1.4% and Australian shares were down 0.9% (despite the surprise rise on Friday which will quickly reverse this morning with the share futures contract showing an initial loss of 34 points for the ASX 200).
Chinese shares though continued to bubble higher with a gain of 2%, helped by expectations for more monetary easing, which should get a further boost this week with the release of monthly data on the health of the Chinese government, starting with the two surveys of the country’s huge manufacturing sector.
Bond yields rose slightly, but the weaker US dollar saw oil and gold prices up (but iron ore prices weaker), while the Aussie dollar rose briefly above $US0.78 before it ended down slightly for the week at 77.52 USc.
The Australian iron ore spot price fell to $US54.10 a tonne, down 70c, from Thursday and from the previous week’s close of $US55 a tonne (according to the Steel Index). But the Metal Bulletin price for iron ore was down 4% to $53/14, according to other reports this morning.
It was the lowest price since the current indexed base price setting mechanism started in 2008-09.
On Wall Street, the S&P 500 closed 4.87 points, or 0.2%, higher at 2,061.02, but lost 2.2% over the week.
Friday’s small gain saw the major US market index back in the black (just) for the year after Friday’s small gain. (By way of contrast US bonds have gained more than 5% so far this year.)
The Dow ended the session up 34.43 points, or 0.2% at 17,712.66, but it lost 2.3% over the past week.
Transportation stocks were among the biggest losers this week, with the Dow Transportation Average losing 4.9%.
It’s a closely watched sub index in the Dow which some market analysts reckon is a leading indicator of future changes in the market. It has been noticeably weaker in recent days.
The Nasdaq added 27.86 points, or 0.6%, to 4,891.22, but ended the week down 2.7%. Biotechnology stocks also took a beating this week, with key indicator losing 5.2% over the week.
Ten year US Treasury bond yields closed below 2% on Friday at 1.96% after a week of much fluctuation but light trading volumes.
A speech late Friday by Fed chair Janet Yellen had no impact on trading or sentiment – the market still sees the Fed raising rates, slowly, later in the year.
In Europe, markets sold off and ended lower after some big gains this year.
The Stoxx 600 share index fell 2.1% for the week, ending seven straight weeks of gains.
The standout loss was by the German market which lost ground last week after rising for 10 consecutive weeks.
The DAX 30 index fell 1.4% last week to end the week on 11,868.33.
The German index has hit 26 record-closing highs this year, with the last one at 12,167.72.
In Australia, the ASX 200 index rose 0.7% but lost 0.9% over the week to end on 5,919.9.
And the All Ordinaries also ended up 0.7% on Friday, but lost 0.8% over the week ending on 5888.9.
The big banks provided strong support on Friday but were generally lower for the week.
The CBA fell 2.1% to $94.34, the NAB dropped 1.2% to $38.83, Westpac fell 1.3% to $39.20, while ANZ Banking Group was flat at $36.80.
The Bank of Queensland lost 7.1% to end at $13.54 after a poorly received interim profit report on Thursday which contained some surprise cost increases.
After Friday’s gains, analysts had been suggesting the ASX 200 might make another push back to the 6,000 point level this week. But Friday night’s weakness and 34 point fall in the futures market should put an end to that thinking for a while.
