The Trump factor finally exhausted itself so far as global stockmarkets are concerned, while the surge in oil prices on Thursday and Friday could not help either.
But despite that our market looks like starting with a small gain today, but that will depend on how the final vote in the Italian governance referendum went. Details are expected to start appearing from around midday onwards.
Eurozone shares fell 0.5% on Friday but the US S&P 500 was flat after the November US jobs report (with its solid payroll growth of 178,000, lower unemployment but lower labour force participation and slower wages growth which looks like it was a statistical oddity).
ASX 200 futures gained 0.4% possibly on expectations that Friday’s 1% decline in the local market was overdone – the oil price advanced another 1% on Friday and gold rose, but analysts are warning of the impact of that Italian referendum result in trading in Asia later today.
Last week saw Japanese and Chinese shares both gain 0.2% each, while US and European shares lost 1% and Australian shares dropped 1.2%.
A weaker weak for the greenback played a part – it lost 0.8%, while the Aussie dollar edged back over 74 US cents to just over 74.44 US cents and a tenth of a cent higher over the week.
Energy shares and the oil prices (up 12%) got a huge boost after OPEC agreed on a production cut that still has holes in it as a concept.
Metal prices and the iron ore prices eased, but bond yields rose in the US and Australia but fell in Europe.
The Dow flipped up and down on Friday night and closed off 21.51 points, or 0.1%, at 19,170.42, for a weekly gain of 0.1%, barely continuing a four-week winning streak.
The S&P 500 finished up 0.87 points at 2,191.95, for a weekly loss of 1%. Defensive sectors such as real estate, utilities and consumer staples were back in vogue.
The AMP’s Chief Economist, Dr Shane Oliver pointed out that “So-called defensive sectors tend to draw buyers during times of uncertainty because they offer comparatively higher dividends, as opposed to high levels of growth, underscoring how market participants seem torn between growth expectations and current valuations."
The Nasdaq ended up 4.55 points, or 0.1%, at 5,255.65, for a weekly loss of 2.7%, its worst weekly decline since before the November 8 elections.
And the Russell 2000 index (it covers smaller companies) which has been one of the biggest gainers of the post-election rally, fell 2.5% last week, which was the small-cap biggest weekly fall since the final week of October.
