The US Federal Reserve’s two-day meeting and interest rate increase this week would normally dominate market thinking, but the big issue remains the Russian invasion of Ukraine, the sanctions imposed on Russia as a result and the impact of them and the fighting on market sentiment and commodity prices.
The events in Ukraine will dominate the week except for the period around the Fed decision on early Thursday morning, Sydney time.
Friday saw Eurozone shares rise 1%, but the US S&P 500 lost 1.3%.
Gold, oil, copper and wheat were all mixed to lower.
Despite those negative leads, ASX 200 futures rose 20 points, or 0.3%, suggesting a positive start to trade for the Australian share market today.
But that again will depend on weekend developments regarding the war in Ukraine.
The Dow fell on Friday and notched its fifth straight week of losses as investors remain cautious about the war between Russia and Ukraine.
The Dow posted a five-day losing streak, as the Russia-Ukraine war continues to be an overhang on financial markets. The S&P and Nasdaq fell for a second straight week.
The Dow fell 229.88 points to 32,944.19, dragged down by losses in Nike and Apple. The S&P 500 fell 1.3% to 4,204.31. The technology-focused Nasdaq Composite fell 2.2% to 12,843.81.
For the week, the Dow lost 2%. Meanwhile, the S&P fell 2.9%, and the Nasdaq slid 3.5% this week.
The yield on 10-year US debt rose to 2.01% today, as inflation remains the major concern of central banks, which see the conflict in Ukraine as an aggravating factor.
The Hong Kong stock market is still taking a battery and closed at new six-year lows on Friday for a loss of 1.6% on the day, 6.17% for the week and more than 12% year to date.
The reasons were varied – Covid in Hong Kong, in China (with a new city of more than 9 million in northeastern China locked down on Friday after a new outbreak), fears about spillover effects from the problems Tsingshan Holdings is having in nickel on the London Metal Exchange and weak trade data for January and February.
Shares in the Chinese ride hailing service Didi plunged 44% on Friday (and are now 87% under the listing price) after Bloomberg reported that it had not signed up to China’s restrictive data retention laws, as it had to list in shares in Hong Kong (after delisting in New York).
That New York listing by Didi triggered the all-out assault on Chinese tech companies of all types by the government of Communist Party leader, Xi Jinping.
Over the week, US shares were down 2.9%, Japanese shares down 3.2% and Chinese shares down 4.2% (and Hong Kong was down 6% plus) but European shares rose 3.5% after a 10% plunge the previous week.
Australian shares also fell 0.7% (after the 1.6% rise the week before) with strength in financials not being enough to offset weakness in materials, IT and telco stocks.
So by the end of last week and from their bull market highs last year or early this year, US and global shares are down 12%, European shares are down 16% and Japanese shares have lost 18%.
Reflecting the strength in commodity prices, strong dividend payments and maybe a less hawkish central bank Australian shares have held up better and are down by 7.4%.
The strength in commodity prices also explains why the Aussie dollar has risen past 73 US and reached 74 cents since the war started whereas normally it falls in crises.
