Weekly Market Update: 16th of August 2021

Domestic Markets | S&P/ASX200 7,628.9pts up 90.5pts (1.2%)

CBA $104.03 up $0.28 (0.3%)
FMG $22.30 down $0.75 (3.3%)

The ASX200 closed the 7,600-point mark for the first-time last week, with Friday’s closing point represent its highest ever finish. This came despite a worsening COVID outlook in NSW, with investors instead focusing on strong earnings reports from some of the largest names listed on the ASX.

Global Markets | Dow Jones 35,515.4 Dow Jones up 306.9pts (0.9%)

S&P 500 4,468.0pts up 31.5pts (0.7%)
Nasdaq 14,822.9pts down 12.9pts (0.1%)

The Dow Jones and S&P 500 both finished in record territory, with both indices responding well to strong labour market data, strong company earnings reports, and the passing of President Biden’s $1.2tn infrastructure bill through the senate. The Nasdaq underperformed, as the labour market data caused increased fears that interest rate hikes will come sooner, which has a disproportionately negative effect on tech stocks.

Europe | Euro Stoxx 600 475.83pts up 5.9pts (1.3%)

The Euro Stoxx 600 recorded its 4th consecutive week of gains, representing the best winning streak since 2006. European investors continued to shake off the effects of the Delta variant, instead focusing on strong European earnings and economic data.

Asia | HSI, CSI, KOSPI, NIKKEI

The Asian majors mostly enjoyed a positive week although the Korean KOSPI, so often the outperformer recently, fell 3.0% as Korea’s rising COVID cases saw restrictions tighten. Hong Kong continued to recover from tighter regulation concerns to rise 0.8%, while the CSI 300 and Nikkei increased 0.5% and 0.6% respectively.

Commodities | Gold $1,779.15/oz rose $16.46USD/oz (0.9%)

Silver $22.65/oz fell $0.67USD/oz (2.8%)
Copper $4.39/lb rose $0.04USD/oz (1.0%)
Iron Ore $160.50/t fell $13.00USD/t (7.5%)

Precious Metals | Gold, Silver

Gold recovered from a midweek dip in precious metals to finish 0.9% higher, as a rise in global COVID cases led to restrictions tightening in some regions, which caused spooked investors to buy the precious metal. Investors continued preference for gold caused silver to sell off, as silvers’ industrial prospects continue to weaken due to decreased manufacturing in China.

Oil | WTI Crude, Brent

Oil continued to struggle against a rise in global COVID cases as the International Energy Agency warned that demand growth for oil could slow as global travel reduces once more. Oil inventories in the US saw a smaller draw than expected, while China’s largest airport announced that it would suspend all incoming and outgoing flights.

Iron Ore

Iron ore prices continued to plummet, as Chinese steel mills indicated that they would comply with demands from Beijing to limit steel production to 2020 levels. This compliance was seen in steel consumption data from China which revealed a 2.5% reduction in consumption for the 7 days following the 5th of August.

Copper

Copper rose as the US Senate passed President Biden’s infrastructure bill, which is set to allocate $1.2tn to projects which will demand an increased amount of copper. On the supply side, copper was also supported in Chile as two of the largest workers’ unions voted to reject Codelco’s latest contract offer. Codelco, the world’s largest copper miner, is working hard to resolve this contract issue.