Markets are now, like the various world economies, in the Trump era and we can expect rising volatility with the new President already issuing a number of edicts making changes to Obama policies, and promising more this week.
The past week saw share markets dip, further correcting some of the large gains seen since November amidst nervousness ahead of Donald Trump’s takeover as US President.
US shares lost just 0.2%, Eurozone shares fell 0.6%, Japanese shares lost 0.8%, but Australian shares fell 1.2%.
Chinese shares though managed to rise 1.1% though helped by good economic data.
Bond yields backed up a bit, commodity prices were mixed and the $US fell slightly which saw the $A rise slightly and end the week firmly above 75 US cents.
On Saturday morning, Sydney time, the Dow closed up 94.85 points, or 0.5%, to 19,827.25, while the S&P 500 index added 7.62 points, or 0.3%, to 2,271.31 and the Nasdaq was up 15.25 points, or 0.3%, to 5,555.33.
For the week, the Dow and the Nasdaq were off 0.3%. The S&P 500 lost down 0.2%. It is the second straight weekly fall for the Dow and the S&P.
The AMP’s chief economist, Dr Shane Oliver says that "after large gains since the US election, shares, the $US and bond yields entered 2017 vulnerable to a correction or a consolidation with uncertainty about US policy under Donald Trump likely to provide a key trigger. This appears to be underway and may have further to run.”
"Donald Trump’s inauguration speech focussed on his broad campaign themes around “making America great again” and “America first”, highlighting that his administration will focus on increasing growth and jobs in the US. As expected there was little in the way of policy detail but President Trump did highlight infrastructure spending,” Dr Oliver wrote at the weekend.
Locally, the sharemarket lost the last of its 2017 gains last week, as global markets digested the increasing-certainty of a ‘Hard Brexit’ and lost its enthusiasm for all things Donald Trump.
The ASX200 lost 0.7% to 5654.8 on Friday, and 1.2% over the week, taking its cues from Wall Street and other regional markets which also ended the week lower.
The second straight week of losses meant the index is also in the red for the year, down 0.2%.
Among the big banks, ANZ suffered the biggest loss, dropping 4.1% after a downgrade to ‘neural’ by Citi, while the other big three shed around 3% over the week.
The week’s top stock was Bega Cheese, up 21% by Friday’s close after buying Vegemite off Mondelez International.
Blood and pharma products giant CSL also had a good week, jumping 13.4% following a surprise profit upgrade on Thursday, while gold miner Santa Barbara reaped the benefits of the gold prise rally, closing up 10.2%.
Outside the ASX 200, shares in luxury products group, Oroton plunged 13% on Friday after the luxury handbags retailer lowered profit guidance due to soft Christmas period sales.
