Gold up, silver up, oil a bit firmer, Wall Street up, April was a month on the up and up for many markets and investment classes.
But according to early report from Asia Monday morning, silver prices are down 10% in early trading, which is something to keep an eye on today
But that’s getting a bit ahead of ourselves.
Judging by the finish on Friday, plenty of investors in the US will be hanging around as America moves into late Spring and then summer, which are traditionally weak times for industrial shares on Wall Street.
But solid and better than expected earnings, (driven mostly by the weak dollar boosting offshore generated revenues and earnings), some takeover activity and the cheap dollar and low cost money, continues to create a very bullish outlook in America for most markets, especially equities.
Many people might complain about the US Federal Reserve’s easy money policies, but that unease doesn’t stop them chasing gold and silver at eve increasing prices, or pursuing selected shares, such as oil and tech stocks, despite fears about the market being overbought.
In Australia the optimism is much more muted and last week saw the weakest trading in nearly two months.
But after Friday’s gains in the US, Australian markets are poised for gains when they resume trading this morning, with Share Price Index futures up 32 points to 4840.
On Friday, the benchmark ASX200 index fell a nasty 49.8 points, or 1%, at 4823.2, while the broader All Ordinaries index slipped 53.3 points, or 1.1% to 4899.
The fall was nasty because it came for no real reason, except concerns about the coming budget, the climbing value of the Australian dollar, corporate earnings and fears about a possible rumoured move in China to either revalue the currency or an interest rate rise (it’s a holiday weekend in China).
That left the ASX200 was down about 1.8% for the week, its worst return in seven weeks.
For the month, the ASX 200 lost 0.6%, its first monthly decline since November.
Australia seemed to take its lead from gloomy thoughts in Hong Kong and Shanghai where both markets lost for the week.
The Hang Seng finished down 0.4%, taking its weekly loss to 1.7%.
It has fallen over 3% since hitting a 2011 high of 24,468.6 on April 8, though it is still up nearly 3% for the year to date.
China’s main stock index snapped a five-day losing streak on Friday, rising by just 0.9%, but ended the week down 3.3% on fears that Beijing may announce more policy over the Labour Day long weekend.
Tokyo’s Nikkei rose 1.7% over the holiday-shortened week.
Other Asian markets were generally higher, as were most European markets.
In contrast many other markets, such as Wall Street, made big gains in the month.
World equities, as measured by the MSCI index rose 3.9% last month, despite anxiety over oil prices slowing global growth.
Much of the drive came from the cheap money programs in the US, Japan and Europe, which have in turn seen the US dollar fall sharply.
Bloomberg said the Dollar Index, which tracks the greenback against the euro, yen, pound, Swiss franc, Canadian dollar and Swedish krona, fell 3.9% in April to 72.026 on yesterday, from 75.857 on March 31.
The index is now at its lowest level since late 2008.
It was the biggest monthly drop since a decrease of 5.4% in September.
The Australian dollar rose more than 6% last month.
Boosted by the rally in silver and gold, the 19-commodities CRB index, a broad indicator of the commodity market, is up 10% for the year, making it the world’s best-performing asset group.
On Friday, the index gained 1.2% to 370.56.
On Wall Street the Dow added 47.23 points, or 0.37% on Friday to end the week and month at 12,810.54.
The Standard & Poor’s 500 Index rose 3.13 points, or 0.23%, to 1,363.61 and the Nasdaq Composite Index edged up 1.01 points, or 0.04%, to 2,873.54.
For the week, the Dow rose 2.4%, the S&P 500 gained 2% and the Nasdaq advanced 1.9%.
That represented over half the monthly gains for the trio of gauges.
The Dow rose 4% in April, the S&P 500 rose 2.8% and the Nasdaq added 3.3%.
Reuters said that "With May, the market is heading into a typically weak period. May has been the fourth-weakest month for the Dow, averaging a 0.2 percent gain since 1950, according to the Stock Trader’s Almanac. It also normally marks the start of the worst six months of the year for the industrials."
The Dow Jones Transportation Average surged to an all-time high on Thursday, the same day US oil prices touched a 31-month high, which is a bit odd given that higher oil and fuel bills are normally seen as a major constraint to transport related stocks.
This all time high on the Transportation average (which is a sub index of the overall Dow), is considered a very bullish positive for the US markets.
In commodities, silver was the star, followed by gold, but cotton, which has been another strong performer, reminded us that what goes up, can come down with a thump, even in the most bullish of markets.
Silver futures prices rose 3.9% last week after racing to near $50 an ounce and gold saw its biggest daily gain in five months on Friday, finishing near $US 1,550 an ounce.
Comex June gold futures rose $US25.20, or 1.6%, to settle at $1,556.40 on Friday, the biggest
