A solid start seems to be ahead for the local market this morning, – but will an iron ore price with a 3 in front of it force second thoughts?
That was after iron ore prices for immediate delivery to Tianjin port in northeastern China lost 2.2% to $US39.40 a tonne on Friday night.
That was the lowest ever recorded by The Steel Index under the current pricing system (before 2009 prices were set by annual contract). Prices fell by more than 7% last week – and more under the pricing reported by the Metal Bulletin.
So will investors drive BHP Billiton shares further under $18 today after they closed down 2.5% for last week at $17.93? Rio shares lost more than 4% to end at $44.38 and Fortescue shares lost 7.5% to end at $1.895.
A week ago today the local market jumped nearly 100 points, despite a slide in iron ore prices the previous week and especially on the preceding Friday.
Last Saturday, the ASX futures market ended around 30 points higher after Wall Street’s 2% surge on Friday. That’s pointing to another solid start this morning.
The lead from Wall Street on Friday night was substantial – a 2.1% gain for the Dow, S&P 500 and Nasdaq.
But those gains were only enough to push the wider markets into small gains for the week.
The S&P 500 rose to 2,091.69 on Friday, posting its biggest one-day gain in nearly three months, after that strong US jobs report for November.
But that left the benchmark index all but unchanged for the week.
The Dow rose 0.3% over the past five days to 17,847.63, while the Nasdaq Composite also ended 0.3% over the week to end at 5,142.71.
The US economy created 211,000 jobs in November, the jobless rate was steady on 5% and tens of thousands of new people started looking for work, and September and October data was revised to show 35,000 more new jobs than previously reported.
Comments in a speech in New York Friday from European Central Bank President Mario Draghi further confused traders.
While he said the bank can do more monetary stimulus if it was needed, traders wanted to know why that wasn’t seen on Thursday when what the ECB did announce disappointed markets.
European stocks fell Friday for a second day in a row, with the market notching up one of its worst week in more than three months, as the slide in oil prices dragged down energy shares.
Continuing disappointment over the European Central Bank’s stimulus plan announced on Thursday continued to weigh on the market.
The Stoxx Europe 600 fell 0.4% to finish at 370.64, down 3.4% for the week after Thursday’s slide of 3.1%.
In Asia, Nikkei 225 Stock Average closed down 2.2%, and 1.9% for the week, ending a six-week run of gains.
Australia’s S&P/ASX 200 fell 1.5% to end at 5151.6, to be down 1% for the week (for the ASX 200). The All Ords lost 1.4% on the day and 0.9% for the week. It ended at 5,201.5
South Korea’s Kospi slipped 1%, Hong Kong’s Hang Seng Index fell 0.8%, and the Shanghai Composite Index fell 1.7%.
