It should be a good start to the week for ASX traders, with ASX futures up 0.3% to 7,459 at 6.30am AEDT.
The market’s fast start comes off the back of Wall St stocks finishing higher on Friday: the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all ended at records after a stronger-than-expected October jobs report.
Here’s what we saw:
- The Aussie dollar rose from lows near US73.65 cents to highs near US74.10 cents and was near US74.00 cents at the US close.
- Global oil prices rose by near 3% on Monday as OPEC+ oil producers rebuffed a US call to lift output.
- The Brent crude price rose by US$2.20 or 2.7% to US$82.74 a barrel.
- The US Nymex crude price rose by US$2.46 or 3.1% to US$81.27 a barrel. Brent crude fell by US$1.64 or 1.9% last week and Nymex crude fell but US$2.30 or 2.8%.
- Base metal prices were generally firmer by up to 1.7% on Friday with tin up the most.
- Lead fell by 0.1%.
- Zinc fell by 0.5%.
- Metals fell 0.3-6.3% last week, with nickel down the least with aluminium down the most.
- The gold futures price rose by US$23.30 or 1.3% to U$1,816.80 an ounce.
- Spot gold was trading near US$1,817 an ounce at the US close.
- Over the week gold rose by US$32.90 or 1.8%.
- Iron ore fell by US$6.95 or 7.0% to US$92.75 a tonne. Over the week iron ore fell by US$14.00 or 13.1%.
Australian markets
The Australian share market had its best week since May mostly due to positive sentiment surrounding central banks and their outlooks over the coming months.
The S&P/ASX200 closed 0.4% higher, up 28.9 points to 7,456.9, with all sectors posting gains for the week aside from energy which fell again on Friday on a weaker oil price.
Australian gold stocks certainly benefitted from the RBA, the US Federal Reserve and the Bank of England indicating they are in no hurry to increase interest rates.
Best and worst performing sectors last week
The best performing sectors were Healthcare up over 3% followed by Communication Services and Industrials, both over 2% higher. The worst performing sectors were Energy down over 1% followed by Materials, which was just in the red, with the Financial sector only just in the green.
The best performers in the S&P/ASX top 100 stocks included Charter Hall Group (ASX:CHC) up over 11%, AMP up over 10% and Cleanaway Waste Management up over 9%. The worst-performing stocks were Domino’s Pizza down over 14%, Westpac down over 9% and IGO Ltd down over 5%.
What's next for the Australian share market?
As we do each week, we asked Wealth Within founder and analyst Dale Gillham for his take on the market.
“The Australian stock market traded up last week. The high close on Friday may finally signal the end to the constant indecision we have been experiencing over the last few months.
“In stark contrast to the week prior where 18 of the top 20 stocks ended the week in the red, only six were in negative territory last week with NAB only just in the red. Interestingly, while the All Ordinaries Index was up, both the Financial and Materials sectors were flat with the market largely being driven by the mid and small cap stocks this week. This is a concern because if both the Materials and Financial sector move down they will take the market with it.
“The Financial sector is the largest in our market and this year it has been the best performer up over 25%, while Materials is the second largest sector and is down over 5%. History shows that the best performing sector one year is generally not the best sector the following year, so Financials may be in for a down move in 2022.
“While I indicated that the market may fall away last week, the fact it has risen is a good sign because if it continues to rise this week, I am confident it will trade up past the all-time high before the end of the year.”
Australian indices
- ASX 200 rose 0.078% to 7,462.70.
- ASX24 futures rose 0.3% to 7,459.
- S&P/ASX Small Ordinaries rose 0.40% to 3,588.10.
- All Ordinaries rose 0.10% to 7,785.10.
US markets
The S&P 500 and Nasdaq each booked a seventh straight record close.
Wall St has been buoyed by an increase in jobs created, with the US Labor Department reporting the economy created 531,000 jobs in October, exceeding forecasts for a rise of 450,000.
Energy and industrials drove gains, while shares in Pfizer increased 10.9% on news of its successful trial of a pill to treat COVID-19.
The trial has found that the experimental antiviral was shown to cut the chances of hospitalisation or death for adults at risk of developing severe disease by 89%.
That news had a positive effect on travel stocks, with investors believing borders will continue to re-open.
The S&P 1500 airlines index climbed 7%, and cruise operators Carnival, Royal Caribbean Cruises and Norwegian Cruise all rose between about 8% to 9%.
According to Refinitiv IBES, approximately 440 companies have now reported, with S&P 500 earnings expected to have climbed 41.5% in the third quarter from a year earlier.
US indices
- Dow Jones was up 0.6% 36,327.95.
- S&P 500 rose 0.4% to 4,697.53.
- Nasdaq rose 0.2% to 15,971.59.
European markets
Ended firmer on Friday, led by Travel stocks up 1.4% and Pfizer’s news.
In London trade shares in Rio Tinto fell 0.2% while BHP shares rose 0.6%.
While the pan-European STOXX 600 ended flat, it was still higher 1.7% in weekly gains – its fifth consecutive week in the green.
Leading the Stoxx 600 higher were Allegro, which surged 10.6% after the Polish e-commerce group agreed to buy Czech online retailer Mall Group for 881 million euros.
France’s benchmark CAC 40 index broke through the 7000 points barrier for the first time ever.
European indices
- STOXX 600 fell 0.048% to 483.44.
- German Dax rose 0.2% to 16,054.36.
- UK FTSE rose 0.3% to 7,303.96.