Markets lost their first half (and second quarter) momentum in the three months to September with iron ore prices so far as Australia is concerned the biggest loser with a 21% slump after an 82% surge in the first six months of the year.
Iron ore is the most important commodity for Australia and the slide in the third quarter saw the Metal Bulletin fastmarkets index finish September 30 at $US93.38 a tonne, up $US2.53 a tonne (or nearly 3%) on the day, but down 21% from the $US118.47 on June 28 (the final trading day of the second quarter and June half year).
The loss in iron ore prices helps explain the 11% plus losses for BHP and Rio Tinto shares in the quarter – Fortescue shares did better, relatively, losing just under 4%.
A stronger US dollar helped crimp some global commodity prices. The Aussie lost 2.5 US cents against the greenback to end at 67.49 on Monday in offshore dealings.
Nickel prices surged more than 35% in the second quarter, topping $US17,000 a tonne as Indonesia moved to halt exports in a couple of years time. Oil fell while copper fell and gold had a solid three months despite a big sell-off on September 30 (Monday).
The Dow rose 96.58 points, or 0.4%, to end at 26,916.83 on Monday (September quarter) while the S&P 500 index added 14.95 points, or 0.5%, to finish at 2,976.74. The Nasdaq closed at 7,999.34, up 6.91 points, or 0.1%.
For September, the Dow gained 2%, the S&P rose 1.7% and the Nasdaq added 0.5%. For the quarter, the Dow and the S&P 500 both rose 1.2%, but the Nasdaq fell 0.1%.
That was sharply lower than the performance in the six months to June and especially the month of June.
June saw the Dow jump 7.2%, its best gain June gain since 1938. The S&P 500 index notched its best June return since 1955 with a rise around 6.9%. The Nasdaq rose 7% return in June.
The Nasdaq jumped 20% in the first six months of this year.
The S&P 500 rose 17.3% for the six months to June 28.
In Australia the local market hit (finally) a new all-time high in late July of 6,845, topping the old November 2007 mark of 6,828.
But then the slide set in and the ASX 200 ended more than 200 points lower on Monday at 6,688.
As a result, the boomlet was well and truly priced in September and the third quarter. The ASX 200 rose a more modest 1.3% in September, its eighth gain in the past nine months while for the quarter, it was up just 1.1%.
June’s gain was 3.47%, and for the final quarter of the financial year, the ASX 200 jumped a tasty 7.09%. That was a solid but not as solid as the 10.1% jump in the three months to March
The weak 3rd quarter performance means the market will find it very hard over the rest of 2019 to match the 17.2% gain for the ASX 200 in the first six months of this year.