Stockmarkets weakened across the world on Friday, easing from record highs as the continuing spread of COVID infections triggered new worries about the health of major economies, including the US, China, the EU and Japan.
More cases in China didn’t help confidence and weak economic data and underwhelming earnings saw oil, gold, copper and the US dollar ended lower or mixed.
MSCI’s gauge of stocks across the globe shed 0.40%.
Emerging market stocks lost 1.02%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.88%.
By the close the Dow had fallen 179.03 points, or 0.57%, to 30,996.98, the S&P 500 lost 11.6 points, or 0.30%, to 3,841.47 and the Nasdaq Composite added 12.15 points, or 0.09%, to 13,543.06.
It was a off week for value stocks. The Dow was up 0.6% for the week, the S&P 500 rose 1.9% and the Nasdaq ended up 4.2% mostly due to a better tone for tech stocks in the wake of Netflix’s better than forecast result.
The pan-European STOXX 600 index lost 0.57% after a survey showed economic activity in the euro zone shrank markedly in January, with the services sector hit hard by coronavirus pandemic-related lockdowns and other restrictions.
The dollar index suffered its largest weekly drop in five weeks, edged higher for the first time since Monday.
The dollar index rose 0.153%, with the euro up 0.03% to $US1.2166, while sterling was around $US1.3674, down 0.42% on the day. The Aussie dollar closed above 77 US cents at around 77.18 US cents, hardly moving over the week.
For the week US shares rose 1.9%, Eurozone shares gained 0.17%, Japanese shares were up 0.4% and Chinese shares rose 2%.
Reflecting the positive global lead and good Australian economic data the Australian share market rose to its highest since February and added 1.3% over the week led by strong gains in IT, retail, health and telco stocks.
Friday saw ASX futures end the week up 15 points and the ASX will start a little stronger this morning.
Bond yields mostly rose slightly as did metal prices, but oil and iron prices fell slightly.
Shares in IBM slumped and was the biggest drag on the Dow after it missed estimates for quarterly revenue, hurt by a rare sales decline in its software unit.
Intel slipped as new CEO Pat Gelsinger’s post-earnings comments suggested the lack of a strong embrace of outsourcing. Those earnings were released earlier than expected because Intel’s website had been hacked.
These losses in the tech sector were offset by gains by Microsoft, Apple and Facebook – all of which are due to report their December earnings this week.
US manufacturing activity surprisingly surged to its highest level in more than 13 years in early January, in contrast to a disappointing result in the purchasing manager data in Europe earlier. US retailing though is not sharing the confidence of manufacturers.
In Japan, data showed a very different story with the January survey showing factory activity slipped into contraction this month and the services sector was more pessimistic as emergency measures to combat a COVID-19 resurgence hit sentiment.
Japanese inflation fell deeper into deflation and it is clear the country’s economy is sliding.
The Senate Finance Committee unanimously approved Janet Yellen’s nomination as the first woman Treasury Secretary, indicating that she will easily win full Senate approval tonight, Australian time – that’s a little bit of good news with a knowledgable, steady hand at the helm of the country’s economy, along with Fed chair, Jay Powell.