US, UK Shares End Volatile Week In The Red

By Glenn Dyer | More Articles by Glenn Dyer

US markets will be closed tonight for the Memorial Day holiday meaning global investors will be without a lead until Tuesday night, Australian time.

That means the usual confusion and exaggerated moves.

UK markets will also be closed tonight and after last week’s big slide and Brexit-driven volatility, that should be a relief.

And after last week’s nervousness globally, anything is possible.

US shares fell 1.2% last week, Eurozone shares lost 2.1%, Japanese shares fell 0.6% and Chinese shares fell 1.5%.

UK shares lost heavily as the political instability hit the governing Conservative Party with Prime Minister Theresa May finally on Friday confirming her resignation next month.

The confusion and fighting over Brexit, the collapse of British Steel, the Jamie Oliver chain of restaurants and problems at several retailers, saw the FTSE 100 shed 10% of its value last week.

In Australia a combination of the return to office of the Morrison government and the move by APRA to relax a key home lending control and higher iron ore prices helped drive a 1.4% gain for the ASX, resulting in a surge in bank, retail and property shares more than offsetting weakness in resources and utilities.

Wall Street closed higher Friday ahead of the long weekend as trade-war fears eased on reports President Donald Trump may ease restrictions against Huawei Technologies as part of a bigger trade deal with China.

That rumour though shouldn’t be taken seriously as Trump and his administration have said one thing on the China trade war and then pushed a much harder line against China.

Despite Friday’s rise, the Dow fell for a fifth week straight, making for the longest weekly losing streak since June 2011, according to FactSet data.

The Dow gained 95.22 points, or 0.4%, to 25,585.69, while the S&P 500 climbed 3.82 points, or 0.1%, to 2,826.06. The Nasdaq edged up 8.72 points, or 0.1%, to 7,637.01.

For the week, all indexes ended lower with the Dow off 0.7%, the S&P 500 down 1.2% and the Nasdaq 2.3% lower, thanks to another weak of selling in big techs such as Apple and chipmakers like Intel.

MSCI’s gauge of stock performance across 47 countries rose 0.39% on Friday, while the pan-European Stoxx 600 index closed up 0.56% on Friday but down 1.47% for the week.

Investors accepted British Prime Minister Theresa May’s resignation as Conservative Party (and Prime Minister next month) leader after failing in a final attempt to win parliamentary support for her deal to exit the EU.

The London FTSE 100 index though lost 10% of its value in a week, wiping out all the gains so far in 2019 and pushing it down more than 2% year to date.

The loss would have been close to 12% had it not been for a rise of 0.6% on Friday in the wake of Mrs. May’s announcement.

The US dollar eased from two-year highs set on Thursday, pressured as the weak US manufacturing activity data sparked worries the trade conflict with China may hurt the world’s largest economy.

The Aussie dollar regained the 69 US cent mark, ending at 69.24 US cents and our 10-year bond yield hit a low of 1.52%. The US 10 year yield closed to 2.32%.

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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