Sharemarkets are poised to run higher this week, even though the US Federal Reserve is widely expected to lift its key interest rate for the second December in a row.
Normally an almost certain Fed rate rise would have had markets swooning, but in the wake of Donald Trump’s election last month, its been up, up and up – last week was no different and this week is shaping up to be more of the same.
Our market will therefore start trading later today with a 20-25 point gain from the futures market tucked into its belt by the close on Saturday morning
That was after eurozone shares rose 0.4% on Friday (and the Stoxx 600 index was up nearly 1%) and the US S&P 500 index rose 0.6% to yet another high, along with the Dow.
That was after the ASX 200 rose 2.1% last week, including a 0.3% to 5560.6 points on Friday.
US shares were up 3.1% to a new record high, and a 5.6% gain in Eurozone shares led by banks which shrugged off the problems in Italy.
In fact the performance in Europe was something of a standout given the lost vote in Italy for the former PM and fears about the stability of country’s banks.
The Stoxx 600 index ended at its highest level since January and the 5.6% gain for the week was the best for 23 months.
The gains for the ASX took the index back close to its 2016 high of August, and Japanese shares added another 3.1% as the yen continued to weaken against the US dollar. On Wall Street, the Trump-inspired rally saw the Dow end up 142.04 points, or 0.7%, at 19,756.85, for a weekly gain of 3.1%, the index’s fifth week of consecutive gains.
The S&P 500 index rose 13.34 points, or 0.6%, to finish at 2,259.53, also for a weekly gain of 3.1%. The Nasdaq added 27.14 points, or 0.5%, at 5,444.50, for a weekly gain of 3.6% and a new high as well. That was despite more concerns about some drag stocks and the health of sales for of big tech groups like Apple.
The yield on the 10-year US Treasury rose 6 basis points on Friday to 2.47% and the dollar index, a measure of the greenback against a basket of major currencies, was up 0.5% at 101.61.
The Japanese yen hit a 10-month low against the dollar, while the euro extended its decline after the European Central Bank on Thursday said it will extend its asset purchasing program.
The Aussie dollar finished at 74.49, steady over the week despite the por September quarter GDP figures (that fall of 0.5%) and the weak trade data for October.
