World stockmarket have finished the September quarter with another round of solid gains: not as dramatic as in the June quarter, but solid nevertheless.
But there are some analysts now wondering if markets will now start moving sideways as concerns about the strength of the recovery in the real economy take hold for a while because market values have gotten ahead of valuations.
There is increasing evidence that the improvement in economic activity in the US, Japan and parts of Europe may be easing, or even slipping. Figures out overnight confirmed that second quarter growth in the US eased 0.7% in the third estimate, against a second estimate of a 1% annual fall.
But there are signs the rebound in housing remains uneven, signs manufacturing in some parts of the US is weak and consumer confidence is starting to be a worry with another fall last month and an uncertain outlook going into the US shopping season at the end of the year.
In Europe, there are signs the easing of the intensity of the slump is continuing, but no real improvement in confidence, output or exports, all of which remain very subdued. Debt and an uncertain 2010 seems to be weighing on the UK (where an election must be held). Germany has gotten its poll out of the way, as did Japan, but that result has impacted confidence in Tokyo.
Inflation is not a worry: deflation is a concern in Japan and in parts of Europe: its no longer a threat in the US, but wages and consumer spending there which are so vital to the overall economy, remain very low.
The Dow fell 29.92 points, or 0.5%, to 9,776.82, leaving it up 2.3% for the month and 15% for the quarter. This was the Dow’s best quarterly rise in more than 10 years.
The S&P 500 Index eased 3.53 points, or 0.3%, to end at 1,057.08, leaving it up 3.6% for September and 15% for the quarter.
The technology-heavy Nasdaq Composite lost 1.62 points to 2,122.42, up 5.6% for September and 15.7% for the quarter.
Since bottoming at a 12-year low March 9, the S&P 500 has gained just under 57%; the Dow has jumped around 49%, and Nasdaq has gained nearly 68%.
The S&P 500 has rallied around 57% from the 12-year lows of early March.
A year ago on Tuesday the Dow suffered its biggest slide ever when it plunged 778 points after U.S. lawmakers first rejected a $700 billion financial bailout.
The Australian dollar was one of the big movers in the quarter, jumping by 9.6% and hitting a series of 13 months highs, including one overnight of 88.47 US cents.
The latest rise came after the strong retail sales and housing figures which prompted more speculation the Reserve Bank will lift interest rates from the current 3% level as early as next Tuesday.
Europe’s Dow Jones Stoxx 600 Index jumped 18% in the quarter, the steepest quarterly rise since 1999, but indexes in Austria (the ATX), Ireland’s ISEQ and Italy’s FTSE MIB were the best performers in western Europe this quarter, with each advancing more than 23%.
The London market jumped 20.8% in the September quarter, a very solid rise; Germany’s Dax rose nearly 4% in September and a respectable 18% in the quarter.
The MSCI Asia Pacific Index (including Japan) added around 3.5% in September, a seventh straight monthly advance and 14% for the quarter.
The MSCI index of Asia Pacific stocks traded outside Japan jumped 21% (emphasising the sharp slowdown in the Japanese market) in the quarter, adding to the second quarter’s 32% rise.
For September, the Nikkei 225 dropped 3.4%, the first fall since February and the steepest decline among the world’s major markets.
It climbed 1.8% in the July-September quarter, after surging nearly 23% in April-June.
Hong Kong’s Hang Seng Index fell Wednesday, but rose 12% in the September quarter, much slower than the 34% rise in the June three months.
The Shanghai Composite Index rose yesterday, but lost around 7% in this quarter, the worst this year so far.
The Aussie market though had its biggest quarterly gain in 22 years.
Although the market finished lower on the day, the All Ordinaries was up 20% over the September quarter — the best gain since the September quarter of 1987, when the market rose by 27.4% (and then went into the Wall Street plunge in October of 1987).
The ASX 200 index rose by 19.9% in the September quarter; the best gain since it started in 1992.
This means another good quarter for super funds.
Gold had its best quarter since the first three months of 2008 (when Bear Stearns was bailed out in March of that year).
Gold regained the $US1,000 mark overnight and ended up around 7%, the best since the 9.9% rise in the March three months of last year.
It hit an 18 month high in early September of $US1,023.85 an ounce, a few dollars under the March, 2008 high of $US1.030.80.
New York platinum futures for January delivery rose 9.9% in the quarter (and closed higher yesterday). It tracks car production (and some speculative interest).
Nymex New York crude oil finished up more than $US3 on the day at just over $US70.50 a barrel.
It was up 0.9% for September and around 1% over the quarter for the most active month, the third quarterly gain this year.
