US Markets
US markets climbed higher on Friday, capping off a tumultuous week where the S&P 500 finished essentially unchanged. The S&P 500 rose 0.47% to close at 5,344.16, the Dow inched up 0.13% to 39,497.54, and the Nasdaq rallied 51 points, or 0.51%, to 16,745.3.
The trading session was quiet, with minimal individual stock news. Nvidia and Meta were down slightly by 0.2% and 0.07%, respectively. The lack of significant movement was noteworthy as investors digested the week’s data. The banking sector remained unchanged. The summary of corporate earnings to date have been neither hot nor cold, they have come in with a 4.1% above on expectations, compared to the historical average of beating expectations by 4.2% according to LSEG data.
This week, consumer demand will be in focus as Walmart and Home Depot report their Q2 earnings. Additionally, US consumer data for July will be released on Wednesday. The VIX index fell to 20.37% as calm returned to the market after a spike earlier in the week. Government bonds were steady, with the US 10-year yield at 3.94%, down five basis points, and the two-year yield slightly lower.
European Markets
European indices ended higher on Friday, with the Euro Stoxx 600 up 0.57% to 499.19, led by gains in the real estate and travel sectors. The FTSE rose 0.24%, and the DAX gained 0.31%. The French central bank announced that growth in France would rise by 0.35% in Q3, aided by the Olympics. The CAC increased by 0.31% on Friday.
In the UK, positive news from the construction sector lifted homebuilders after Bellway, a British builder, provided an upbeat forecast due to government plans to increase housing stock. Novo Nordisk jumped 6.3% on Friday after recovering from earlier losses due to a lower profit outlook. In Germany, chemical conglomerate Lanxess surged 6.0% after reporting improved cash flows. German inflation data met expectations at 2.6%, and interest rates were little changed.
Australian Markets
The ASX200 continued its upward trend on Friday, with September futures advancing 59 points, or 0.76%. The AUD/USD slipped slightly to close at 0.6578.
On Friday, the main index gained 1.25%, rebounding from earlier losses in the week. The rally was broad-based, with all sectors higher. The technology sector led with a 3.08% rise, mirroring gains in the US. Xero was up 2.61%, and Wisetech rose 2.66%. The real estate sector, which had suffered heavy losses earlier, rebounded by 2.52%. Goodman Group climbed 3.22%, and Mirvac added 2.60%, though the sector is still down 2% over the last five days.
Notable movers included News Corp, which announced increased profits and plans to divest Foxtel, sending its shares up 7.6% to $41.38. REA Group also reported strong earnings, with shares rising 6.7%. Fellow internet company Seek rose 3%. Transurban reported a dividend increase to $0.65 following a surge in profits, with shares up 1.5%.
Today, consumer stocks like JB Hi-Fi and Carsales will report as earnings season gains momentum. Later in the week, Australian data will include the wages index and labour force numbers. Australian government bond yields fell slightly, with the 10-year yield down 2 basis points to 4.05% and the 2-year down 2.5 basis points to 3.77%.
Commodities
Oil prices advanced for the third consecutive day, with WTI crude rising 0.9% to US$76.84 and Brent closing at US$79.46, up 0.66%. Weekly gains were around 3.5%, driven by easing concerns about US growth and increased geopolitical tensions. News of renewed attacks on Kyiv by Russia over the weekend will only add to this concern. Copper rose by US$72, or 0.82%, to close at US$8,866.50 on the LME. Iron ore slipped towards US$100, settling at US$100.20, down 0.89%.
Gold was little changed at US$2,431.32, up 0.16%, while silver fell 0.31%. Bitcoin continued its rally, reaching US$61,018 on Saturday, an additional 2.6% increase.
Economic Calendar
- China: New Yuan Loans (Jul) – 6:00 PM
- US: Consumer Inflation Expectations (Jul) – 1:00 AM
This article was written by James Woods, Portfolio Manager, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
