Another difficult week ahead for global markets, especially the US with Friday’s slide in oil prices likely to hit sentiment.
Friday ended a rough week globally. US shares fell 3.8%, Eurozone shares lost 1.6%, Japanese shares fell 0.2%, Chinese shares fell 3.5% and Australian shares declined 0.3%.
Reflecting the “risk off” tone bond yields fell, credit spreads widened and commodity prices fell with the oil price down another 11% over the last week leaving it down 34% from its high in early October.
The $US rose slightly and this weighed on the $A which ended at 72.33 US cents.
Oil prices and weak techs dominated last week. Friday’s late driven sell-off saw the S&P 500 close in correction territory in Friday’s light volume, holiday-shortened session.
Although oil prices had been weak in Asian and European trading, they slumped sharply in Wall Street trading, especially in the closing hour up to the 1 pm finish for the week.
The S&P 500 lost 0.7% leaving it down 3.8% for the week and 10.2% from its record high on September 20.
It is the third time this year the index has closed in a technical correction (a fall of 10% or from its most recent peak): the others occurred in early February and early April, both down more than 10% from the late January peak.
The S&P 500 is now down 1.5% for the year to date and at levels not seen since October 2017.
The Dow fell 0.7% on Friday, down 9.5% from its October peak and has lost 1.75% for the year so far.
The Nasdaq Composite, which lost 0.5 on Friday, is well and truly entrenched in correction territory with a 14.4% slump from its late August record. Despite that, the Nasdaq remains up half a percent so far in 2018.
The Nasdaq tumbled 4.3% last week while the Dow ended the week 4.4% lower,
The yield on the benchmark 10-year US Treasury was down 0.9 basis points at 3.0517% and inched lower to end around 3.4% at the close. The dollar gained ground, with the DXY index up 0.2% to 96.931.
