Global markets had a mixed performance at the end of trading on Friday.
United States
Jerome Powell sidestepped investors’ concerns over the outlook of future interest rate hikes during his speech on Friday. The Chicago Fed’s Austan Goolsbee commented that policymakers may be overemphasizing the importance of steep job losses to quell inflation. Economic data revealed that personal incomes rose by 0.4% in August compared to 0.2% from the month prior, while personal spending curbed from 0.9% in July to 0.4% in August. Inflationary data revealed prices rose by 3.5% in August compared to 3.4% in July from a year earlier. Meanwhile core prices, which is of prime interest to the Fed, fell from 4.3% in July to 3.9% in August as forecast. The Michigan Consumer Sentiment report released on Saturday was better than expected, with a reading of 68.1 compared to forecasts of 67.7. Over the course of the week, investors seek meaning in upcoming data including the ISM Manufacturing PMI on Tuesday, the ISM Services PMI on Thursday and jobless claims report on Friday.
The S&P 500 closed -0.27% lower on Friday with eight out of the eleven sectors closing in the red. Energy was the biggest underperformer, sinking -1.67%. Consumer discretionary was the best performing sector rising by 0.53%. The DOW fell by -0.47%, the Russell 2000 Index fell -0.51%, while the NASDAQ bucked the trend to rise 0.14%. The yield on the 2-Year government bond was down by one basis point to 5.04% while the yield on the 10-Year government bond was unchanged at 4.57%. The VIX Index advanced 1.04% to 17.52.
Europe
The Euro STOXX 600 Index closed 0.39% higher at the end of trading on Friday. Real estate, information technology and utilities were the star performers, jumping 2.75%, 1.27% and 0.90% respectively. Energy was the only sector to close lower, declining by -1.72%. The CAC climbed 0.26%, the DAX advanced 0.41% while the FTSE edged up 0.08%. Inflationary data over the weekend revealed the region’s inflation declined to 4.3% in September from 5.2% in August, falling short of expectations. Core inflation fell from 5.3% in August to 4.5% in September, also below forecasts.
*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.
Australia
The ASX 200 Index is expected to open lower on Monday, with ASX futures down 0.50% to 7048. The Index closed 0.34% higher at 7048 on Friday. Core Lithium rocketed 19.12% after reporting the highest profit for the year at $10 million, boosting the materials sectors by 1.22%. South32 also rose by 3.67%, while big caps RIO and BHP added 1.02% and 1.19% respectively. The big names in banking saw their share prices rise, namely ANZ (0.71%), NAB (0.66%), Westpac (0.09%) and CBA (0.02%). Technology stocks had a mixed performance, XERO advanced 0.38%, Wisetech gained 0.11% while Life360 fell -0.83%, with the sector closing 0.24% higher. The energy sector was the biggest underperformer closing -3.27% lower. Big caps Santos, Woodside and New Hope Corp saw their share prices drop by -0.63%, -0.61% and -0.47% respectively. The yield on the 10-Year government bond was up by three basis points to 4.48%, while the local currency strengthened against the greenback by 0.1% to 0.6435.
Commodities
In commodities, oil prices fell with the price of WTI and Brent Crude receding by -1% and -0.97% to $90.79 and $92.20 respectively. In precious metals, spot gold was down by -0.87% at $1,848.63 while spot silver declined by -1.96% to $22.18. In industrial metals, copper advanced by 0.80% to $373.75, while SGX Iron Ore climbed 1.32% to $119.61.
Economic Calendar
02nd October 2023
BoJ Summary of Opinions 10:50
EuroZone Unemployment Rate 20:00
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.
