Morning Market Wrap: US markets record best week since August

20 Jan 2020
Wall Street appeared to end the week on a high note ahead of the Martin Luther King public holiday, as a number of market sensitive events provided a positive outlook and boosted investor sentiment…

Stock Markets

All three major US indices reset records as Wall Street experienced its strongest week since August following the Wednesday signing of the first stage of a trade resolution between Beijing and Washington, a reasonable start to the US reporting season, the passing of the US, Mexico and Canada trade deal by Congress and strong economic data released by US.

Economic data released on Friday showed that US houses beginning construction in the month of December totalled 1.61 million vs a forecast of 1.38 million, resetting a 13-year record, and that consumer sentiment has maintained a healthy reading of 99.1 for 2020 so far.

For the week, all three indices posted their largest percentage gains since August 30, 2019. The Dow Jones has been up for five of the past six weeks and holds a year-to-date return of 2.84%. The S&P500 holds a year-to-date return of 3.06% and has risen for the past two consecutive weeks, while the NASDAQ has risen for six straight weeks and holds a year-to-date return of 4.46%.

The ASX200 closed 22 points higher at 7,064 and ended the week firmly above the key 7,000 level with a 1.95% gain for the week and a 5.7% gain for 2020, as local markets relished in the completion of the US-China phase one trade agreement, stronger-than-expected economic data released in the US and upbeat US reporting season results.

Materials led the broad gains recorded over Friday with a 1.21% advance, while a decline of 0.02 and 0.75 percent by Financials and Energy appeared to have little impact on other sectors.

Market heavy-weights BHP Group Limited (BHP), Rio Tinto Limited (RIO) and Fortescue Metals Group Limited (FMG) advanced 1.17, 1.78 and 3.73 percent respectively, as a combination of better-than-expected data from China, strong quarterly results by RIO and strong Iron ore prices lifted the sector as a whole.

The big-four banks closed mixed as a 0.49% decline by Commonwealth Bank of Australia (CBA) offset midrange advances by National Australia Bank Limited (NAB) and Westpac Banking Corporation (WBC).

Polynovo Limited (PNV) closed up 2.08% on Friday and recorded a 21.9% gain for the week in what appears to be a possible delayed response by investors to strong sales results released earlier in the month. Similarly, Appen Limited (APX) closed 4.44% higher on Friday and recorded a 11.58% return for the week as a Bell Potter broker note indicated expectations of strong growth in its results for 2019 and at least 30% EBITDA growth for FY 2020.

*Note: These prices are based on futures and/or CFD pricing and may therefore differ slightly from spot pricing.

Commodities and Currencies

US oil closed unchanged on Friday at $US58.54 a barrel, while Iron ore experienced a significant boost from Chinese growth data for the month December and rallied 1.3% to $US97.58 a tonne. Gold prices moved 0.08% lower to $US1,557.50.


This article was written by Thomas Brunton – Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3633.

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Steve Aldred

TLS is nowhere near it’s all time highs.

Thomas Brunton

Morning Steve,
Apologies for the typo, the market wrap has since been corrected.

Simon Walker

Why were the morning market wrap arriving in the afternoon lately?

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