Weekly Market Update: 31st of May 2021

Domestic Markets | S&P/ASX200 up 149pts (2.1%)

CBA up $2.51 (2.6%)
FMG down $0.18 (0.8%)

The ASX 200 reached all-time highs last week, reaching a new intraday high of 7,186.5 points late in the day as the index threatened to cross the 7,200 mark for the very first time. Still, strong performances from the big banks and miners carried the index to an all-time closing high of 7,179.5.

Global Markets | Dow Jones up 322pts (0.9%)

S&P 500 up 48pts (1.2%)
Nasdaq up 278pts (2.1%)

A range of positive economic data releases continued to indicate the strength of the American economic recovery, with personal spending increasing 0.5% in April, amongst other data points. US President Biden announced that he will seek $6tn in federal spending for FY22, in a move which will likely see the US to see its highest sustained levels of federal spending since WWII.

Europe | Euro Stoxx 600 up 4.5pts (1.0%)

The Euro Stoxx 600 hit new all-time highs on Friday as the index reached 448.98 points, with European banks stocks rising to 15-month rise as they tracked a rise in eurozone bond yields. This week’s market wrap sees a switch in coverage from the Stoxx 50 to Stoxx 600, to align with the broader market.

Asia | HSI, CSI, KOSPI, NIKKEI

The Asian majors all enjoyed strong weeks, with China’s CSI 300 the strongest performer, rising 3.6%. Korea’s KOSPI was the clear underperformer, with lingering domestic inflation fears causing continued caution, which saw the KOSPI only rise 1.0% over the course of the month.

Commodities | Gold rose $24.33USD/oz (1.3%)

Silver rose $0.41USD/oz (1.8%)
Copper rose $0.18USD/oz (4.0%)
Iron Ore fell $3.50USD/t (1.8%)

Precious Metals | Gold, Silver

Precious metals continued their resurgence to break back above the $1,900 mark for the first time since early January. This came as the US dollar depreciated and Treasury yields fell due to continued hawkishness from the Federal reserve, which meant that gold became more attractive as an inflation hedge when a key inflation data point returned its highest result in over two decades.

Oil | WTI Crude, Brent

Strong economic data out of the US boosted the prospects of strong increased fuel demand, which boosted WTI crude to $66.5/bbl, close to two-year highs, while Brent Crude also enjoyed a strong week, as both major oil markets shrugged off ongoing concerns of new supply out of Iran.

Iron Ore

Continued attempts from China to decrease the price of iron ore saw iron prices bounce around, as the market continued its attempts to decipher what China’s proposed policies meant for iron ore, and if China would actually stick to its promise to decarbonise at the expense of its steel output. With supply improving out of major producer Brazil, the drop in iron prices could be set to continue.

Copper

After period of consolation, copper prices continued their march upwards to finish the week at $4.68/lb. This came as Biden’s plan to spend $6tn on infrastructure projects in FY22 boosted the prospects of copper, while an environmental bill in Chile threatens 40% of production from the world’s largest producer.