Wall Street’s record close won’t matter as this week opens with some vital earnings due, starting with Tesla tonight and then a Federal Reserve meeting on Tuesday and Wednesday with a post meeting statement that will be picked over for any changes of language on inflation, rate rises and tapering.
For ASX traders Friday’s record left the Share Price Index up 22 points ahead of the resumption of trading later this morning – and those other factors didn’t matter, though the slide in iron ore prices will soon assert itself.
The positive global trading towards the end of last week helped push the Australian share market up 0.6% to a new record high last week despite the expanding lockdowns.
Bond yields continued to decline with the Aussie 10 yea yield at 1.19% on growing forecasts for a contraction in GDP this quarter.
Wall Street and local traders ignored a further worsening in the pace of Covid infections in major economies and in NSW – lockdowns in Victoria and South Australia look like they will be eased tomorrow (Tuesday).
All three Wall Street indexes closed at record highs on Friday after a wobbly week in which investors fretted over the Delta coronavirus variant and cheered an economic rebound by Friday.
US Treasury yields rose, then eased back to end at 1.276% for the 10 year yield on Friday to be slightly higher over the week.
The US dollar followed a similar trend ending slightly firmer, and the Aussie dollar ended the week around 73.66, lower than the close the week before.
Local investors will take heart from stronger closes for gold and oil, but iron ore sold off again on Friday and is now in the sharpest fall in 17 months.
US and European shares were helped by good US earnings and dovish guidance from the European Central Bank on Thursday.
The Dow rose 238.2 points on Friday, or 0.68%, to close the week at 35,061.55, while the S&P 500 added 44.31 points, or 1.01%, to 4,411.79. The Nasdaq jumped 152.39 points, or 1.04%, to close at 14,836.99.
The Dow added 1.05% for the week, the S&P 500 was up 2% and the Nasdaq jumped 2.84%, lifted by the good results from Twitter and Snap on Thursday which spread to other techs on Friday ahead of the big reporting week (See earnings story).
Twitter and Snap shares added 3.8% and 24.5% on Friday, respectively, after their upbeat results after Thursday’s close. That left Twitter up 8% for the week and Snap shares surged more than 31%.
For the week US shares rose 2% to a record high and Eurozone shares rose 1.9%. Japanese shares were closed at the end of the week so missed the US rebound and fell 1.6% and Chinese shares eased 0.1%.
