The worsening Covid problem in and around Perth will see investors move onto a cautious footing when trading resumes on the ASX later this morning.
The three-day lockdown and at least two cases in Perth have raised fears of a worsening in coming days.
That was after eurozone shares were flat on Friday but the US was strong with the S&P 500 up 1.1% on the day helped by strong economic data.
That saw ASX 200 futures only rise 4 points, or 0.1%, pointing to a weak start to trading today.
The spread of the virus in Perth (but so far not in Melbourne where the first man infected ended up late last week) will overshadow the weak close on the ASX 200 future platform on Friday with a gain of just one point.
That was a curious reaction to a positive day’s trading on Wall Street on Friday which bounced back strongly a day after a sell-off blamed on plans by the Biden administration to boost taxes in a series of economic statements in the next few weeks.
Friday’s surge had a mockery of those who saw the sky falling after Thursday’s slide on the tax fears.
Covid though is continuing to cause havoc – it destroying the Indian and Brazilian economies while Japan has introduced a state of emergency in some regions.
The central government declared a third state of emergency with new restrictions imposed in Tokyo, Osaka, Kyoto and Hyogo prefectures. Local leaders requested the move as they face a sharp rise in new coronavirus cases.
Worryingly, the declaration comes as Tokyo prepares to host the Summer Olympics, slated to begin in July, and just before Japan enters one of its biggest holiday seasons, Golden Week, starting this Thursday and running until May 5.
The Tokyo market fell half a per cent on Friday and more than 2% last week on the worsening situation.
The Dow jumped 227.59 points, or 0.7% on Friday, to end at 34,043.49.
The S&P 500 rose 1.1% to 4,180.17 led by financials and materials, while the tech-heavy Nasdaq Composite climbed 1.4% to 14,016.81 ahead of a big test this week with the likes of Apple, Tesla, Microsoft, Alphabet, Amazon and Facebook due to release first quarter earnings reports.
The S&P 500 dipped 0.1% over the week, while the Dow and the Nasdaq fell 0.5% and 0.3% for the week, respectively
Eurozone shares fell 0.4% but Chinese shares managed to rise a solid 3.4% from a double bottom (two charting lows close together) after sharp falls since February.
US bond yields ended at just over 1.56% – they have gone nowhere since the 13 month high of 1.77% at the end of March.
Despite the weak US lead Australian shares were basically flat for the week.
Bond yields fell slightly in the US and Japan but were flat in Australia and rose slightly in Europe.
Oil fell but metal and iron ore prices rose. Copper hit a nine year plus high on Friday.
The Aussie dollar was little changed around 77.47 US cents despite a further fall in the greenback.
The ASX200 closed 0.1% higher on Friday at 7060.7 – having been negative for nearly the whole day.
The ASX lost 2.8 points across the five sessions, its worst week in five.
But it is still within 1.5% of its record high close set in February 2020, having touched a new post-pandemic peak on Monday.
