Weekly Market Wrap: 26th of April 2021

Domestic Markets | S&P/ASX200 down 2.8pts (0.0%)

CBA up $1.40 (1.6%)
FMG up $0.84 (4.0%)

After dipping back below the 7,000-mark midway through the week, the index rallied back to finish above that important level for two consecutive days. Friday saw the ASX 200 deviate from the American indices for the first time in weeks, finishing up marginally as potentially bad news for America was seen as a positive for foreign markets, including the ASX.

Global Markets | Dow Jones down 157 (0.5%)

S&P 500 down  5pts (0.1%)
Nasdaq down 36pts (0.3%)

Despite close to 90% of companies which have so far reported beating expectations, the US market experienced a negative week. While economic data was positive on the whole, rising COVID infections in countries which are key trade partners dampened sentiment, while the news that US President Joe Biden is looking to raise the capital gains tax on the wealthy makes US companies relatively less attractive.

Europe | Euro Stoxx 50 down 20pts (0.5%)
There was mixed COVID news from Europe, with Germany announcing strict new restrictions for certain regions a few days before French Prime Minister, Jean Castex, announced that the third wave appeared to be over. ECB President Christine Lagarde played her part to reassure markets, saying that talk of QE tapering was far too early at this stage in the recovery.

Asia | HSI, CSI, KOSPI, NIKKEI
The Asian majors saw mixed weeks with the CSI 300 up 3.4%, while the Hang Seng also had a positive week. The Nikkei suffered the most, with fears of new lockdowns, (confirmed on Friday) causing Japanese economists to fear a second recession.

Commodities | Gold flat 0.31USD/oz (0.0%)

Silver flat 0.00USD/oz (0.80%)
Copper rose 0.16USD/lbs (3.8%)
Iron Ore rose 10.00USD/t (5.7%)

Precious Metals | Gold, Silver
Precious metals initially looked set to enjoy positive weeks, with gold looking likely to retest the $1,800 level on the back of rising infection rates in large countries such as Japan and India which increased the safe-haven appeal. This appeal was quickly capped however as Treasury yields ticked upwards, the US dollar appreciated slightly, and economic data revealed new positive signs for the American recovery.

Oil | WTI Crude, Brent
Oil prices came off this week as Brent crude fell by 1.1% and WTI crude fell by 1.6%, as rapid rises of COVID cases in India led to forecasts that Indian oil demand could decrease by 20%. Further negative price action came from a surprise buildup of American inventories, while positive talks between Iran and the US could soon see sanctions on Iran lifted, which would add 2m barrels of oil to the market. Losses were capped by positive signs from both the US and Europe, that both regions might soon pick up their demand for oil with the economies recovering well.

Iron Ore
Iron ore rose to fresh yearly highs, and their highest point since August 2011, with short-term demand for iron ore stronger than supply levels. Rio Tinto and Brazilian giant Vale both announced lower production due to poor weather and operational struggles, while China announced that steel production rose 19% last month, despite new environment-related restrictions.

Copper
Copper continued its strong run, now sitting only $0.14/lb below all-time highs. Economic data released last week helped to drive copper prices, with preliminary US PMI figures indicating an increased demand for the red metal, with proposed infrastructure measures to further boost copper. Prices were also helped on the supply side, with Chile, the world’s largest producer, remaining in lockdown, with exports affected.