Onwards and upwards for global markets as the Trump rally continued.
Wall Street ended with small losses this morning, killing a 12 day winning streak for the Dow ahead of the President’s first State of the Union speech to the US Congress at 1pm Sydney time today.
Enthusiasm for Trump’s as yet broad policy picture has seen many sharemarkets jump 8% or more since January and around 4% to 5% last month alone (and 1.6% in Australia).
Now we start getting some of the detail on economic policies – more substantive than the concentration on immigration, deregulation and other politicised issues.
While commodity prices again rose last month, the gains were a fraction of what we saw in earlier months. In fact global commodity based stocks such as miners (think BHP, Rio etc) have come off sharply since mid February (around the 16th).
Once Trump’s speech is digested (he will wax lyrically about a stronger economy, tax cuts infrastructure spending and a lot of other flim flam), it will be time for the markets to focus on the Fed meeting in around a fortnight, with chairman Janet Yellen to speak on Friday.
The US economy grew at an unchanged annual 1.9% in the final quarter of 2016, almost half the 3.5% rate seen in the September quarter. For 2016 as a whole, the economy grew at a weak 1.6%.
The S&P rose 3.7%, the best in 11 months. The Dow added 4.9% for its best monthly performance since November, while the Nasdaq added 3.8% for the 4th monthly gain in a row.
Comex gold for April delivery fell $1.10, or about 0.1%, to $US1,257.70 an ounce, up around 3.8% for the month.
Comex silver for May rose 0.3%, to end the month at $US18.465 an ounce. That’s a gain of 5.6% for February.
And Comex May copper ended at $2.714 a pound, up 1.6 cents, or 0.6%. For the month, was up almost 3%. In New York April West Texas Intermediate crude futures fell 4 cents, or less than 0.1%, to settle at $US54.01 a barrel. That was a rise of around 2.3%.
In London April Brent crude futures April lost 40 cents, or 0.7%, to $US55.53 a barrel. The contract, which expires at the settlement, was down around 0.1% for the month. May Brent traded at $55.95, up 47 cents, or 0.8%.
The big mover in energy was US gas futures. April natural gas ended around $US2.783 per million British thermal units, up 8.3 cents, or 3.1%.
But based on the most-active contracts, prices lost more than 10% in February. Those losses will put pressure on coal and other energy forms in the US and if sustained, will mean yet another year of falling coal demand and production – no matter was Donald Trump decrees.
Iron ore for delivery to China’s Qingdao port slid $US1.06 to $US91.27 a tonne, according to Metal Bulletin. That’s more than 7% higher than January.
The Stoxx Europe 600 rose 0.2% to end the month at 370.24. The all-European benchmark notched a February advance of 2.8%, marking its third monthly gain in four months. In London trhe Footsie ended higher on the day and 2.3% higher for February.
In Australia, the ASX 200 added 1.6% for the month, despite big losses by major miners such as BHP Billiton and Rio Tinto.
The gain was mostly due to advances by the likes of the big banks, Wesfarmers and CSL but not Telstra.
The materials index lost 4.4% in February, thanks to falls by miners like BHP, Rio Tinto and South32, which fell between 7.5% and 10% over the month.
