Now that’s what you call a rebound – feline, dead or alive, US markets have had their best start to a year for more than 30 years – that after the taper tantrum sell-off in November and December saw a miserable end of 2018 and a rotten year as a whole.
The S&P 500 and the Dow posted their biggest January rally in decades. The S&P 500 rose 0.9% to end around 2,704.10 on Thursday, January 31 while the Dow fell 12 points, or less than 0.1%, to 24.999.67. The Nasdaq Composite rose 1.4% to end near 7,281.74 to be up a very solid 9.74%
The 30 stock, blue-chip Dow had its strongest January since 1989, jumping 7.71% while the S&P posted its best January since 1987, rising 7.87%. Omen investors though noted that 1987 may have started well, but ended miserably thanks to Black Monday in October and its 22% all-time record plunge in the Dow.
Even European markets joined – despite the Brexit problems, the rise of populists in France and Germany, and a weakening economy. the Stoxx 600 index was up more than 6% in the month.
In Asia, the Nikkei fell more than 3%, as did the Shanghai market, but in contrast, the Hang Seng in Hong rose a bullish 8.1%.
The ASX 200 added 3.9% for January, its best monthly gain since last April, driven by higher prices for big miners (such as Fortescue with a solid 34% gain in the month).
The ASX Metals and Mining Index rose 8% in the month and the ASX Energy Index was up more than 11% as oil prices rebounded.
A surge in iron ore prices – helped by the latest Vale mine dam disaster in the final week of the month, helped push up the wider market.
Since the disaster happened on Friday, January 25, the iron ore price is up more than 14% to $US85.35 a tonne on Thursday, the highest the price has been for well over a year (The most recent peak of $US82 a tonne was in January, 2018).
In fact world, iron ore prices are up 25% since November 22 when the current rebound started. They rose 14.2% in January.
The Fed’s decision to sit on rates and its switch to a “patient” rather than a raising stance, saw the Aussie dollar push well over 72 US cents on Thursday. It ended around 72.64 to be up more than 2.1 cents from the start of the month. So much for all the gloom about a sub-70 US cents year.
Australian bond yields fell 6 points over January to end at 2.24% as the key the US 10-year yield also fell 6 points to end around 2.63%.
Comex gold futures ended January on a bullish note with a sharp rise on Thursday after the US Federal Reserve left interest rates unchanged and used language hinting at a pause in monetary tightening — a bullish development for gold and other commodity prices.
The most-active April gold contract climbed $US12.90, or 1%, at $US1,328.40 an ounce, after settling at $US1,315.50 an ounce before the Fed’s updated policy statement on Wednesday. Comex gold futures traded more than 3% higher for the month.
Comex March silver was up 1.5% at $16.165 an ounce, with prices up around 4% for the month.
Comex March copper ended at $US2.79 a pound, up 0.8% for the session around 6% for the month. April platinum added 1.1% to $US825.50 an ounce, rise of 3% for the month. March palladium jumped 2.1% to $US1,344.30 an ounce, up more than 12% in January.
Oil also ended January with solid gains, despite a dip onThursday. West Texas Intermediate crude futures fell by 44 cents, or 0.8%, to settle at $US53.79 a barrel after trading as high as $US55.37. The gain for the month was around 18%.
In Europe, Brent crude added 25 cents to end the month at $US61.90 – a gain of around 16%.
