Weekly Market Update: 19th of April 2021

19th of April 2021

Domestic Markets | S&P/ASX200 up 68pts (1.0%)

CBA up $0.86 (1.0%)
FMG down $0.07 (0.3%)

After a slow start to the week, the ASX 200 responded well to strong economic data released domestically and abroad to finish above the 7,000 mark on Wednesday for the first time since February 2020. The market followed this up with two further positive days, closing the week at 7,063.5 points – a little over 130 points from all-time highs.

Global Markets | Dow Jones up 400pts (1.8%)

S&P 500 up 56pts (1.4%)
Nasdaq down 152pts (1.1%)

A combination of strong earnings reports from American businesses, especially the banks, strong economic data, and the Federal Reserve’s renewed pledge to keep interest rates low saw the S&P 500 and Dow reach new record highs for the week. The Nasdaq enjoyed a positive week too, with sentiment slowly nudging US bond yields down.

Europe | Euro Stoxx 50 up 54pts (1.4%)
Once again, a rise in COVID cases in major European countries did nothing to dampen concerns about a rise in COVID cases – while the cases are rising, investors seemed to react well to countries being reluctant to impose stricter lockdowns as the vaccine continues to be rolled out.

Asia | HSI, CSI, KOSPI, NIKKEI
A poor start to the week saw the Nikkei 225 and CSI 300 suffer subdued weeks, with both indices struggling to overcome poor domestic data. The South Korean KOSPI, which has regularly been the strongest performer of the Asian majors in recent months, again performed the best, rising 2.1%. The Hang Seng also rose, 0.9%.

Commodities | Gold rose 32.95USD/oz (1.9%)

Silver rose 0.70USD/oz (2.8%)
Copper rose 0.12USD/lbs (3.1%)
Iron Ore rose 4.50USD/t (2.6%)

Precious Metals | Gold, Silver
Gold prices reached seven-week highs on Friday, with the 1.9% weekly rise the biggest gain since mid-December, while the more volatile silver also benefited from increasing industrial demand. Precious metals benefitted from the US dollar reaching 4-week lows and Treasury yields slowly declining, while the FDA’s recommendation of pausing the use of J&J’s vaccine also increased safe-haven demand for the gold and silver.

Oil | WTI Crude, Brent
Oil markets enjoyed a positive week with Brent crude rising 5.6% and WTI crude increasing 5.9% as both the International Energy Agency and OPEC+ increased their 2021 demand forecasts, by 230k and 100k barrels per day, respectively. A weakening US dollar also aided oil sentiment, though upside in oil was capped by concerns that demand would remain weak as the outlook for global travel remains murky.

Iron Ore
Iron rose for another week to rise to $175.50/t, close to highs which were seen in early March, with data showing that iron ore imports reached 5-month highs despite Chinese manufacturing unexpectedly expanding at its slowest rate in almost a year. Positive sentiment was also added by the Chinese government announcing that it planned to strengthen controls on raw materials, which is expected to limit costs for companies.

Copper
Copper enjoyed a largely positive week with strong economic data indicating that demand for copper would remain strong, while COVID continued to impact production from Chile, by far the largest supplier of copper in the world. Adding to the positive outlook for copper was a number of investment banks doubling-down on their strong outlook for the red metal.