The bounce back in global shares continued last week led by Wall Street which more than halved the year’s fall so far to -4.7%, from -10.5%. But the gains were not shared globally.
For the week US shares rose 1.6%, eurozone shares added 1.8% and Japanese shares rose 1.4%.
But Australian shares fell 1.5% and Chinese shares lost 3.3% and all due to the big 6% slide on Thursday.
Friday saw eurozone shares add 1.6%, but the US S&P 500 gave up an early gain of 0.6% to end down 0.2%.
Tokyo rose 0.6%, Hong Kong more than 2.5% and Shanghai 0.9%, while the ASX was all but flat on the day (down just 1.2 points).
Looking at today, the weak lead from US shares saw ASX 200 futures end up 7 points or 0.1% early Saturday morning, meaning a flat start to trading.
There was more action in the Australian dollar though which fell 1.5% to $US0.71.30 in response to the stronger US economic data such as GDP and inflation, which helped bring back ‘rate rise looms’ thinking among more analysts on Wall Street.
The data helped convince some investors the economy isn’t sliding into recession, but the upgraded second growth estimate of a 1% (annual) growth in GDP in the quarter (from 0.7%) was still down sharply from the 3.9% annual rate in the second quarter and meant growth through 2015 was 2.4%.
That means US economic growth has failed to top 3% in any of the last 10 years.
The inflation data showed a rise in the Fed’s preferred way of measuring cost increases – but the 1.7% annual rate is still short of the central bank’s 2% target.
But more investors were reassured by that and the rise in oil prices over the week.
Bond yields rose marginally in the US on the higher inflation and growth data, but fell elsewhere, especially in Europe and Asia.
The Group 20 Finance Minister’s final communique after a two-day meeting in Shanghai won’t be reassuring for markets and investors – a lot of talk about how monetary policy can’t stimulate growth on its own, but no sign of any concerted effort on fiscal policy (spending), except words.
In New York, the S&P 500 ended last week up 1.6% (to 16,639.97) for its second weekly gain in a row. If there is no loss tonight, the S&P 500 will have ended February with a gain of 0.4%.
European equities rallied for a second day, for a 1.6% gain over the week.
