After global share markets had another week of solid gains last week, this week will see caution until the US Federal Reserve delivers what is expected to be another interest rate cut in the early hours of Thursday morning.
By the close on Saturday morning, Sydney time US shares had added 1% for the week, Eurozone shares, 1.5%, Japanese shares jumped 3.7% and Chinese shares were up a modest 0.6%.
In comparison, the ASX underperformed with the ASX 200 index adding just 0.3% for the week
The surge in recent weeks though has US and global shares come close to the record highs seen in July.
Last week the big assists came from the rate cut and return of quantitative easing by the European Central Bank, an easing in the Trump trade war tensions with China, but further confusion over Brexit and just what will happen between now and the end of October.
Solid US retail sales figures for July added to the underlying confidence on Friday.
Friday’s session on Wall Street saw the Dow eke out an eighth-straight gain.
The Dow rose 37.07 points, or 0.1%, to end the week at 27,219.52, but the S&P 500 fell 2.18 points, or 0.1%, to 3,007.39, and the Nasdaq Composite Index lost 17.75 points, or 0.2% to end at 8,176.71.
For the week, the Dow added 1.6%, the S&P 500 ended up 1% and the Nasdaq rose 0.9% as the new range of Apple iPhones left investors a bit underwhelmed but still added 2.5% over the week.
At Friday’s close, the Dow was 0.5% from its record at 27,359.16 hit on July 15, while the S&P 500 was also half a percent from its all-time high at 3,025.86 hit on July 26.
The Nasdaq ended the session on Friday 1.9% from its all-time closing high at 8,330.21 also hit on July 26.
A big bonus for sentiment was the better than expected 0.4% rise in retail sales in July which left them a very strong 4.1% above the level of a year.
Economists said the rise was driven entirely by purchases of new cars and trucks though, as retail sales ex-autos were flat.
Strong demand for big-ticket items like automobiles suggests the US consumer remains confident about his future prospects.
On Thursday, the European Central Bank on Thursday cut its deposit rate from minus 0.4% to minus 0.5%, while announcing it would restart open-ended purchasing of long-term government bonds at a pace of €20 billion a month in an effort to cut long-term interest rates.
The Federal Reserve will deliver its monetary policy statement, with further rate cuts widely expected, on Thursday morning but the Bank of England the Bank of Japan also hold policy meetings this week which could feed into the expected rate cut from the Fed.
