Even after slipping 0.3% on Friday, the ASX200 advanced 1.0% for the week, closing just 100 points/1.2% below February’s all-time high. Overall, it was a relatively quiet week as traders eyed the long weekend as an excuse to pull up stumps early, compounded by the uncertainty of Friday night’s May Payrolls numbers (jobs data) – in hindsight, there was nothing to worry about there!
Although it felt quiet, it was the market’s largest one-week gain since mid-May, with the ASX200 now advancing for four consecutive weeks and set to start the fifth positively. As we approach the EOFY, it’s hard to imagine following all of the Trump concerns that the ASX200 is up 9% for the FY, yet another example of how equities deliver over time:
The winners and losers over the week were again a mixed bunch, except the high-flying gold sector, which made a rare appearance in the loser’s enclosure:
Winners: James Hardie (JHX) +13%, Lovisa (LOV) +11.6%, SGH Ltd (SGH) +8.5%, Sol Patts (SOL) +8.5%, Min Res (MIN) +6.9%, Bendigo Bank (BEN) +6.4%, Charter Hall Group (CHC) +6.5%, and Whitehaven Coal (WHC) +4.1%.
Losers: IDP Education (IEL) -54%, West African Resources (WAF) -15.2%, Domino’s (DMP) -9.1%, Light & Wonder (LNW) -8.1%, Bellevue Gold (BGL) -8.1%, Nuix (NXL) 7.3%, Healius (HLS) -5.1%, and IPH Ltd (IPH) -3.4%.
On the economic and geopolitical front, the primary focus was on Friday’s US Jobs report, which sent the bulls charging as if they were in Pamplona:
- On Friday night, US stocks rallied to within 2.5% of February’s all-time high following a stronger-than-expected Jobs Report.
- Bond yields also rose along with the $US Dollar following the data as money markets trimmed bets that the Federal Reserve will cut interest rates this year – stocks are still adopting a “Glass-half-full” attitude.
- Hopes of easing US-China trade tensions, combined with the solid jobs report, to drive markets higher into the weekend, with all 11 S&P 500 sectors advancing on Friday night.
- Earlier in the week, disappointing Chinese manufacturing data (PMI) showed their economy remains under pressure, leading to a subdued week for the ASX heavyweight miners.
- We also had weaker local growth data, with GDP up 1.3% YoY, well below expectations and south of the RBA’s modelling, which opens the door for more aggressive rate cuts locally.
Overseas markets ended with a bang on Friday night with US markets closing at their highest level since February following the jobs report, which allayed fears of an imminent economic downturn. The S&P 500 closed up over 1%, above the psychological 6000 level, with all major US indices marching in tandem. In Europe, it was a more muted affair with the EURO STOXX 50 finishing up +0.4% and the UK FTSE +0.3%.
- The SPI Futures are up +0.3% for now, though there is no trade locally on Monday so Tuesday open will be influenced by another session in the States before we come back online.
