Wall Street ended the week on an up note, and all three major indices finished the week with gains of at least 4 percent. This trend is good news for the Australian Securities Exchange (ASX). The ABC business team’s Stephen Letts reports that the ASX 200 is up 0.2% at the opening indication. This proposed hike is in sharp contrast to encouraging inflation data out of the U.S. markets. As global markets adjust, investors are specifically watching a handful of economic bellwethers that drive trading action.
On Friday, S&P 500 was up 0.6%, with the Dow Jones Industrial Average up 0.7%. The Nasdaq was up too — 0.4%. Wall Street is booming, reflecting a tremendous increase in investor confidence. This increase is the result of better-than-forecast consumer spending and income numbers, which have calmed the market.
Positive Trends in Global Markets
In addition to gains in Wall Street indices, European markets showed equally diverse performances. The DAX in Germany jumped 0.9%. At the same time, the FTSE in the UK jumped 0.8%, and the Eurostoxx index followed suit with a 0.8% increase. These gains on all the major international markets indicate a synchronized recovery, which will be welcomed by Australian investors.
Gold prices were up 0.3% to $3,760 per ounce. At the same time, international benchmark Brent crude oil prices skyrocketed by 1.0%, climbing to $70.13 for a barrel of crude oil. Not every commodity was riding this bullish wave, with iron ore prices going in the opposite direction, down 2.2%, to $103.60 per tonne.
The developing world’s crypto market was happy to follow this positive sentiment, with Bitcoin booming 1.3% to $110,913. When looking at the general market indicators, even with volatility in some more targeted sectors, you can see a growing sense of confidence among investors.
“The one bright spot was that income and spending were a little bit firmer than expected, which means the consumer isn’t falling off a cliff as the market was expecting.” – Gennadiy Goldberg, TD Securities head of US rates strategy.
Australian Dollar and Local Market Performance
And despite all that upbeat equities news, the Australian dollar wasn’t having any of it, and was unchanged at 65.45 US cents. The currency’s relative stability indicates that the local money guys are playing it safe. Like all markets, they are concerned about potential changes in global market dynamics and economic indicators.
Over the past 5 days, the ASX 200 had risen by a paltry 0.2%. This increase underscores the uncertainty Australian investors continue to have given the current state of the global economy. To the local real estate market, these are signs that recovery is beginning. Participants are keeping an eye out for recent changes due to global forces.
Weekly Overview and Future Expectations
U.S. markets were mixed on the week. The S&P 500 fell just 0.3%. Worker numbers fell by a massive 841,000 in December, yet Friday’s advances have boosted hopes for a stronger trading picture in the months ahead.
Investors will be looking ahead to several key economic reports which may help to further shape strategies. As markets continue to respond to inflation data and consumer spending reports, participants in the ASX will be looking for cues that could signal sustained growth.
