3rd of May 2021
Domestic Markets | S&P/ASX200 down 35pts (0.5%)
CBA down $1.35 (0.4%)
FMG up $0.93 (4.3%)
The Australian market had a mixed week, reacting well to economic data which was released out of the US but still edging lower, even as base commodity prices rallied. Still, the end of the week and subsequently the month, saw April become the first ever month which finished above the 7,000-point mark.
Global Markets | Dow Jones down 169pts (0.5%)
S&P 500 up 1pt (0.0%)
Nasdaq down 54pts (0.4%)
Despite companies continuing to largely report better than expected earnings reports during the week, the general outperformance in the prior weeks meant that much of the positive performance was already priced in. The Dow and Nasdaq were down while the S&P 500 was flat, reflecting broad fears surrounding the energy sector as US President Joe Biden focuses on green energy, as well rising Treasury yields.
Europe | Euro Stoxx 50 down 39pts (1.0%)
Although there was a raft of data out in Europe which beat expectations or was in line with it, the biggest data point, preliminary German GDP, missed expectations by 0.2% to contract by 1.7%, with broader preliminary European GDP also contracting, indicating that economic conditions will take longer to recover in Europe than in most other developed economies.
Asia | HSI, CSI, KOSPI, NIKKEI
The Asian majors all experienced negative weeks, with China’s CSI 300 the relative outperformer, dropping 0.2%. South Korea’s KOSPI was the worst performer, declining 1.4% as it was announced that this coming week would see the short-selling ban in South Korea lifted. This was to the dismay of Korean retail investors, who outperformed institutional and foreign investors last year after the ban was implemented and saw the KOSPI perform better than any other major index.
Commodities | Gold fell 8.53USD/oz (0.5%)
Silver fell 0.10USD/oz (0.4%)
Copper rose 0.13USD/lbs (2.9%)
Iron Ore rose 1.50USD/t (0.8%)
Precious Metals | Gold, Silver
Precious metals suffered this week, with gold having its worst week in over a month while silver didn’t perform much better. Data revealed that the US economy expanded at an annual rate of 6.4%, which made precious metals less desired as a safe-haven asset, while the data also pushed US Treasury yields higher, which further dragged on precious metals. Still, rising COVID countries in India and a weakening US dollar, helped to soften precious metals losses.
Oil | WTI Crude, Brent
Although oil prices came off late in the week, Brent crude still rose 1.7% over the course of the week while WTI crude roses 2.2% in a week where OPEC+ announced that they would slowly ease production cuts from May to July, a week after forecasting that oil demand would grow by 6m barrels per day in 2021. This increase in demand forecast comes despite a worsening COVID situation in major demanders of oil, such as India, Japan and Brazil.
Iron ore had mixed week and while iron ore prices delivered into Tianjin still rose 0.8%, Friday’s close still saw prices fall $6 below weekly highs. The drop in iron prices midway through the week came as China implemented new policies to try cool down the overheating steel sector, with the policies meaning that Chinese steel mills will find it harder to export steel and cheaper to import scrap metal, which should in turn push iron ore demand lower.
Copper prices managed to finish above US$10,000 a tonne for the week or $4.46/lb, which puts it just below all time highs of $4.478/lb. Copper performed well during the week as strong economic data was released which supports copper prices, while leading supplier, Chile, reported 10 consecutive months of production decreases.