Markets in Europe and the US may have finished the September quarter with a bang, but local investors are wary and our market will start essentially flat today – just one point higher, according to the overnight futures market for the ASX 200.
That caution nicely summed up the finish yesterday – 2% plus gains across Europe but they couldn’t hide a miserable quarter, and solid gains on Wall Street, especially in the stricken Nasdaq which had been belted hard by nervy investors taking profits from the booming healthcare and pharma sectors.
Some cynics might describe it as window dressing on the last day of the month and quarter (and we saw an odd 4% jump in copper futures as well), others would describe it has a relief rally that the misery is over for the time being.
But it resumes again today here in Australia and Asia, and don’t be surprised to see markets go either way – things are very confused at the moment. We have the important US jobs report for September tomorrow night, our time that will direct the market’s attention.
But before that we get the usual first of the month reports on the health of global manufacturing, starting with the usual two from China around midday – the government survey and the final report from Caixin/Markit (which hit a six and a half year low of 47 in its flash report a week ago and triggered much of the present unease).
Like or not, unless we get the mother of all market booms this quarter, many asset classes are heaving for a losing year in 2015.
On Wall Street, there’s something of an adage that September 30 is the worst day of the year for investors – it is nearly always a day of losses at the end of the month of September (when northern hemisphere traders and managers return from holidays, and after the weak summer trading.
Ahead likes October and its host of anniversaries 0 1929 and 1987 come to mind right away.
So the surprise surges yesterday, especially in the last hour of trading were just that, surprising.
The S&P 500 ended with a bang and Wednesday’s performance, which saw a jump of 1.91% its best close to a third-quarter since 2008, according to Dow Jones data.
The S&P 500 lost 2.6% over the month and dropped 6.9% over the quarter.
The Dow jumped 235 points, or 1.47% but fell 1.5% over the month and 7.6% over the quarter. It is the Dow’s run of losing quarters since a six quarter losing streak which ended in 2009.
The Nasdaq Composite 102.84 points, or 2.3%, which trimmed the falls to 3.3% for the month of September and a nasty 7.4% for the quarter.
In Europe The Stoxx 600 index lost 4.3% for the month and 8.8% for the quarter, the London market fell 3% and 7%, Paris, 4.7% and 7% and German’s Dax was crunched (the VW diesel scandal didn’t help either), losing 6.8% in the month and 11.7% in the quarter.
In Asia, Japan’s Nikkei 225 lost 14.1% for the quarter, while China’s Shanghai Composite slumped just on 29%
The Australian market had its worst quarter in four years. The ASX 200 closed the third quarter 8%, worse than the nasty 7.3% plunge in the three months to June.
It marks the worst quarter since the European debt crisis in 2011, when the sharemarket fell 13%. It was down close to 4% in September, with yesterday’s 2.1% jump making the performance look a lot better than it actually was.
