Sleepy August has become back at work September when markets more often than not start shaking, rattling and roiling.
Wall Street and Australia eased, but most European markets were up, as were major markets in Asia, especially Hong Kong.
Our market will start September (and Spring) with a small loss of around 16 points this morning, according to the overnight trading on the ASX 200 futures market.
That was after a solid 2.3% slide in August.
The big issue for markets at the end of August and into September is the timing of the next US interest rate rise from the Fed – September or December?
Commodities were mixed – oil rose, gold copper and wheat dipped, while iron ore was all but unchanged over the month by a few cents at $US60.56 a tonne yesterday.
The northern summer officially ends this weekend with the US Labor Day holiday Monday. From Tuesday onwards trading desks across Wall Street, London, Frankfurt and all points European and Asian, will start filling as brokers, bankers, hedge funders,private equity, instos (fundies) and their advisors return to work from their summer breaks.
So from the limited 1% to 2% trading pattern of the past month or so, markets will start getting more volatile, especially ahead of the Fed meeting later this month that could lift US interest rates.
American markets fall 56% of the time in September, according to US data. In fact if Wall Street is down this month it will be the second in a row for the Dow, but not Nasdaq which rose last month.
The Dow in fact ended a six-month winning streak overnight, while the S&P 500 ended a five month rebound.
The Dow fell 53.42 points, or 0.3%, to close at 18,400.88, down 0.2% for the month. The S&P 500 fell 5.17 points, or 0.2%, to finish at 2,170.95 for a monthly decline of 0.1%.
But while the Nasdaq shed 9.77 points, or 0.2%, to end at 5,213.22, it closed up 1% in August. In Europe, the Stoxx Europe 600 index fell 0.4% to 343.53 overnight Wednesday, but added half a per cent last month, the second monthly rise in a row.
Germany’s Dax ended lower by 0.6% at 10,592.69, but still ended August with a 2.5% gain. In London, the FTSE 100 lost 0.6% to close at 6,781.51, trimming its monthly gain to 0.9%.
In Asia, the Nikkei gained 1.0% to 16,887.40 yesterday meaning Japan’s benchmark index gained 1.9% in August.
Hong Kong stocks ended near 10-month highs on Wednesday, as the Hang Seng index fell 0.2%, to 22,976.88, but registered a sharp 5% rise over the month.
In Australia the S&P/ASX 200 index ended 0.8% lower yesterday at 5433.0, posting its fourth loss over five sessions, with miners and energy stocks dragging the market lower.
For the month, the benchmark index slipped 2.3%, after its blockbuster 6.3% surge in July.
The worst performing sector over the month were telecoms, which dropped 8.9%, followed by a 5.8% slide by utilities. August’s best was the small IT sector, which jumped 4.6%. Financials fell 2.6%, but materials was up 0.1%, despite big losses this week.
Gold miners did it tough towards the end of the month as global prices for the metal fell. The All Ords’ gold miners index is down 19% since July 11, but is still up 75% this year, echoing similar performances in offshore markets
