Weekly Market Update: 8th of February 2021

ASX News Feb 8, 2021 / Reading Time: 2 mins
By Julius Zondag Reading Time: 2 mins

Domestic Markets | S&P/ASX200 up 233pts (+3.5%)

Markets rebounded on the back of positive news for Australian equities.

CBA +$5.13 (6.14%)
FMG +$1.44 (6.61%)

The ASX200 followed global markets in a positive week, rising 3.5%. The RBA reported that it would continue maintain low interest for at least 3 years and keep bond rates low, which will likely provide support for Australian equities.

Global Markets | Dow Jones up 1,195pts (+4.0%)

Major indices saw all-time highs as poor economic data raised hopes for increased stimulus.

S&P 500 +174pts (4.7%)
Nasdaq +702pts (5.3%)

Wall Street had a green week, with the Nasdaq and S&P500 booking fresh all-time highs. This came on the back of increased stimulus hopes due to an under-performing January jobs report.

Europe | DAX, CAC, FTSE
European markets enjoyed a positive week with the Euro Stoxx 50 seeing 5 consecutive days of gains. The FTSE only rose 1.3%, with the pound proving a drag on the index on the back of the BoE economic update.

Asia | HSI, CSI, KOSPI, NIKKEI
The CSI 300 increased by 2.5% over the course of the week, while the Nikkei 225 rebounded 4.0%. The indices were lifted by earnings reports, which were generally better than expected. Sino-US tensions however proved a drag on the Chinese market.

Commodities | Gold down 31.77USD/oz (1.7%)

Commodities saw a mixed week with silver the most volatile due to the attempted short-squeeze.

Copper +0.09/Lbs (2.5%)
Iron Ore -2.50USD/T (-1.6%)

Precious Metals | Gold, Silver
Precious metals both rebounded on Friday as the US dollar depreciated and the US unemployment report showed that the economy added only 49 thousand jobs. With that being said, gold fell 1.7% over the course of the week, losing $31.77 to $1,815.25. Silver experienced a much more volatile week as Reddit-inspired traders attempted to short squeeze the metal – after jumping 7.3% on Monday, the apparent failure of the short squeeze saw silver crash 8.1% on Tuesday, eventually seeing a 0.3% weekly loss to $27.03 an ounce.

Oil | WTI Crude, Brent
Oil markets enjoyed a strong week as OPEC+ complied with their production targets and actually produced less than expected due to the production woes of some of the group’s African members. Sentiment was also boosted by signs that the spread of COVID is finally slowing down as the vaccination roll-out gathers steam. Brent crude rose 7.8% for the week to $59.34 while WTI crude rose 9.2% to reach its highest point in a year.

Iron Ore
Although iron ore price saw a midweek rebound, they still fell 1.6% over the course of the week to $155.50. Weak Chinese demand for steel continued weak demand for iron, though the rebound came as Brazilian giant Vale reported lackluster, though mostly expected, production figures.

Copper
Copper rose 2.4% over the course of the week to $3.64 a pound, with much of its gain being due rally on Friday due to supply concerns. Chinese data indicated that Chinese manufacturing slowed to 7-month lows on the back of increased COVID infections. This however was outweighed by Chilean data, as the world’s largest copper producer saw production fall 8.7% from a year earlier, amidst general supply concerns.