Commodities took a whack in May from the rapid change of heart markets had about the next US interest rate rise – led by iron ore’s 24% slide, copper’s near 9% drop and gold’s near 6% slide. But oil had a 4th monthly rise because of production problems in some major producers.
Sharemarkets were on the whole positive (indeed Australia saw a 2.4% jump in May, the best since early 2005). Wall Street wasn’t so positive – except for the tech sector where share prices jumped as investors played catch up.
In fact Wall Street mixed close overnight told the story of May.
The Dow and the S&P 500 lower, and Nasdaq higher overnight.
For May the Dow rose less than 0.1%, the S&P 500 was up 1.5% and Nasdaq saw a 3.6% gain as tech stocks raced to catch up after the sell-off earlier in the year.
In Europe, the Stoxx 600 also reversed an early rise that took it to a five-week high and finished down 0.8%.
For May as a whole, the index rose 1.7%, its third successive monthly advance.
Japan’s Nikkei index ended 1% higher yesterday after a 1.4% gain on Monday. Those two days produced most of the 3.4% gain in May.
And it could go higher if Prime Minister Abe reveals, as expected later today, a moderately – sized stimulus package of around $US50 billion and the deferment of the final 2% rise in the country’s sales tax (to 10%) until 2019.
Iron ore and steel rebar contracts in China fell last month. Rebar prices on the Shanghai Futures Exchange fell 28% from their April highs, and 22% in May.
Iron ore futures in China dropped 24%, the worst since launching in 201. Spot iron ore for delivery to China fell 0.4% to $50.15 a tonne on Tuesday, according to Metal Bulletin.
In New York, July WTI crude settled at $US49.10 a barrel, down 0.5%, for the session. For May, prices climbed 6.9% from the settlement of the front-month contract at the end of April.
Brent crude, rose 3.2% in May, closing at at $49.69 a barrel.
This also marks the fourth consecutive monthly gain for both markers and their longest winning streaks since April 2011.
Brent and WTI prices are now up 80% and 86% respectively since their low for the year — but both remain more than 55% below their mid-2014 highs, when the slump in crude started.
Comex gold futures ended May down almost 6% for the month, the first monthly loss this year, thanks to expectations for another US interest rate rise this month or July.
But prices rose overnight —their first in nine sessions.
June gold added less than 0.1%, for the session, to settle at $US1,214.80 an ounce. Prices lost 5.9%, or nearly $76 an ounce, from the $US1,290.50 settlement at the end of April. Gold futures had settled at a 15-month high of $US1,295.80 on May 2.
Silver and copper suffered much larger falls for the month. Comex July silver fell 1.7%, to $US15.994 an ounce, for a monthly loss of 10.2%. And July copper lost 0.9%, to $US2.096 a pound, down 8.2% for the month.
An afternoon rally yesterday failed to push the ASX into the black, but the benchmark still managed to post its best May in more than a decade.
The ASX 200 ended down 29 points, or half a per cent, to 5378.6, while the All Ordinaries also fell 0.5%, or 26 points, to 5447.8.
But the month was good to the index, finishing up 2.4%, the best month of May since 2005.
