Markets were mixed over the past week and there’s more ahead this week. The issues will be the same: the war in Ukraine, a rebound in oil prices, increased Fed hawkishness and a continuing surge in bond yields being offset by mostly solid economic data.
There will be more testing data this week – the US jobs data for March on Friday (see the Diary) and the start of month surveys of manufacturing and service sector activity – last week’s flash reports indicate economies are still doing well.
While sharemarkets moved higher last week and there are expectations for more of the same this week, the question is whether the strength is relief driven about the war in Ukraine, or perhaps that the Fed has started increasing rates.
If it’s the latter, watch for more volatility as the battle in market thinking between hawks wanting big rate rises ASAP and those who want a steadier approach.
Of course there’s a few hours of diversion today with this year’s Oscars and whether the listed streaming giant Netflix wins with one of its movies (The Power Of The Dog is favourite). That will see a boost to Netflix’s share price if that happens
Eurozone shares rose 0.1% on Friday and the US market was higher and that positive US lead saw ASX futures rise 33 points, or 0.4%, pointing to a positive start to trade for the Australian share market later today.
On Wall Street, the S&P 500 rose Friday to end a winning week even as investors weighed big interest rate hikes from the Fed and war in Ukraine.
The Dow rose 153.3 points, or 0.4%, to 34,861.24; the S&P 500 added 0.5% to close at 4,543.06 and the Nasdaq dipped 0.2% to 14,169.30.
All three major averages notched second consecutive winning weeks. The Dow added 0.3%. The S&P 500 gained 1.8%, and the Nasdaq rallied nearly 2%
The S&P 500 is now up about 3.9% higher in March, more than erasing its losses since Russia invaded Ukraine late last month.
For the week Japanese shares rose 4.9% but Eurozone shares fell 0.9% and Chinese shares fell 2.1%. Australian shares rose 1.5% with utilities, resources and IT stocks leading the rise.
Bond yields rose sharply on inflation concerns and increased expectations for rate hikes. – the key US 10-year yield touched 2.5% for the first time in years and ended at nearly 2.48%.
Yields surged 14 points on Friday afternoon, a big move in the huge bond market.
Oil prices rebounded but are still below the levels seen soon after the start of the war.
Metal prices were mixed, and iron ore prices rose.
The rising trend in commodity prices saw the Aussie dollar rise above and end the week at 75.11 US cents, the highest level for five months and despite a rise in the greenback off the bidding war from Federal Reserve members about the pace and size of interest rate rises.
