Global sharemarkets weakened (but not in Australia) Friday off the back of worries about less than forecast US economic data and the continuing concerns that the huge rally since early March was overdone.
The US dollar fell, oil was weak in spite of the greenback’s fall which normally helps boost the prices of oil and other commodities.
The dollar fell after the G 20 leaders agreed to keep emergency stimulus spending in place until a recovery takes hold, meaning interest rates will remain at the their current very low levels.
Bond yields fell, the US 10 year bond saw its rate end at 3.32%: it hasn’t been there for some months.
Weak data on US durable goods orders and new home sales added to the less than emphatic flow of figures during the week.
While consumer confidence has again picked up, it seems that is reflecting the upturn in activity a month or so ago, not now.
The MSCI all-country world index of stocks fell 0.62% and all three major US stock indexes suffered their worst weekly decline since early July.
The Dow lost 42.25 points, or 0.44% on Friday to end at 9,665.19. The Standard & Poor’s 500 Index was down 6.40 points, or 0.61%, at 1,044.38.
Nasdaq fell 16.69 points, or 0.79%, to end at 2,090.92.
Friday’s fall pushed the Dow to a 1.6% fall over the week.
The S&P 500 index dipped 2.2% and the Nasdaq fell 2.0%.
As the month of September draws to a close, the market remains higher for the month so far, with the Dow up 1.8%, the S&P up 2.3%, and the Nasdaq up 4.1%.
For the quarter, which ends this week as well, the S&P is up 13.7% so far.
Since hitting lows in March, the S&P is still up 54%
The Dow has gained 47.6%, as of Friday’s close and Nasdaq has jumped 64.8%.
Reports from the Commerce Department on durable goods and home sales overshadowed the rise in the Reuters/University of Michigan Surveys of Consumers Sentiment Index for September to the highest since January of last year.
Orders for manufactured goods dropped by the largest amount in seven months and the rise in new home sales fell short of forecast, raising questions about the strength of the economic recovery.
European shares posted their steepest weekly drop since July as they reacted poorly to the US economic figures.
The Dow Jones Stoxx 600 Index lost 2.4% last week. That left it up 51% since March 9.
National indexes declined in all 18 western European markets except Greece.
London’s FTSE 100 lost 1.8% and Germany’s DAX slid 2.1%. France’s CAC 40 fell 2.3%.
In Asia, the MSCI Asia Pacific Index fell half a per cent last week.
Japan’s Nikkei share average fell 2.6% on Friday and 1% for the week.
China’s Shanghai Composite fell 4.2% for another poor week. That was the biggest fall across the region.
Vietnam, Thailand and Indonesia were among markets that posted gains this week.
The Australian market finished up on Friday after a rally in banks reversed an earlier fall.
At the close, the ASX200 index was up 12.1 points at 4713.3, after falling as low as 4639.4 in the morning.
The All Ordinaries gained 6.8 points to 4714.8.
For the week the market was up half a per cent because of Friday afternoon’s rebound.
Among the sectors, financial stocks were up 1.2% after the ANZ’s $1.9 billion buy of the other half of its wealth management joint venture with ING.
The ANZ rose 30 cents to $23.79, after coming out of a trading halt late.
In response, the National Australia Bank jumped 55 cents to $30.42, Westpac added 61 cents to $26.17 and Commonwealth Bank rose $1.30 to $51.30.
Luxury goods company OrotonGroup shares jumped 67 cents, or 14.6%, to $5.25 after it it boosted profit 6.1%.
Network Ten majority stakeholder Canwest said it had ended the sell down of its 50.06% holding in the broadcaster. We will learn the identity of some of the new holders on or after October 1.
Ten added 2.5 cents to $1.39, Seven rose 5 cents to $6.25 and Consolidated Media was up 1 cent at $3.01.
