Futures trading on Friday put the ASX 200 up a tiny 6 points for the resumption of trading on the local market today – which, without the guide from the US tonight (there’s no trading tonight in the US because of the Memorial Day holiday), will make for a quiet end to May and start for June over the next two days.
But there will be quite a few things for local investors to watch – the Victorian Covid lockdown, some more trading updates for June 30 companies (which will pop up from time to time this week) and the fate of the PEXA online conveyancing business which could be sold thanks to efforts over the weekend by Link Administration to pre-empt a deadline by US private equity group and Domain for a $3.1 billion offer revealed late last week.
Media reports on Sunday and Monday said PEXA’s board and shareholders have signed a deal to list on the ASX with a $3.3 billion enterprise value.
Friday saw an end of week surge in the ASX200 which closed at a fresh record closing high of 7,179.5 – a gain of 1.2% for the session and 2.1% for the week.
The index is also up 2.2% for the month with just today’s session to go.
Friday’s broad-based rally saw most stocks except those in the information technology sector rise, with financials and materials proving the standout performers.
Commonwealth Bank shares closed above the $100 mark at a record close of $100.56, up 1.6% for the day and 2.5% for the week.
Westpac shares rose 1.4% on Friday and 3.1% for the week, NAB shares were up 1.4% on the day and 2.3% for the week. ANZ shares rose 1.1% on Friday and 3% for the week.
BHP led miners higher with a jump of 2.9% to $48.16 (and that saw it up 0.8% for the week). Rio shares fell 0.7% for the week but ended Friday up 2.6%.
All this while Victoria experienced the first day of its latest Covid lockdown on Friday.
The final two days of the week saw a jump in corporate news including multi-billion-dollar takeover bids from the likes of Ramsay Health Care for UK hospitals operator Spire, as well as a $4 billion offer from Betmakers for Tabcorp’s wagering business.
Tabcorp shares rose 2.1% market but Betmakers shares plunged 16% on Friday as its investors game the bid ($1 billion in cash and $3 billion in Betmakers shares) a big thumbs down for the enormous dilution they will suffer.
Global share markets ended the final trading day for for May for Wall Street with reasonable gains for the day, the week and the month.
For the week US shares rose 1.2%, Eurozone shares gained 1.1% and are nearing their 2000 tech boom high, Japanese shares were up 2.9% and Chinese shares rose 3.6%.
The greenback edged higher, gold and commodity prices firmed (despite the stronger greenback which is generally bad for US dollar priced commodities) and traders fretted about more signs of higher inflation.
But US bond yields fell and ended May lower than they started despite Friday’s monthly report on consumer spending and prices (the stat favoured by the US Federal Reserve to track inflation) coming in stronger than expected.
The US Commerce Department released the so-called PCE (Personal Consumption Expenditure) report which showed that consumer prices rose 3.1% in the year to April, easily topping the Federal Reserve’s 2% target and posting its largest annual gain since 1992. They were up 0.7% month on month.
That helps explain why bond yields fell on Friday after the release of the data – the yield on the 10-year Treasury note closed at 1.58% against the 1.63% at the end of April and the 1.77% at the end of March when the PCE report for February was reported showing inflation rising to around 1.6%.
US inflation is rising – but the base 2020 data was very weak which is making the rises of 2021look larger than they would be normally.
Consumer spending, which accounts for more than two-thirds of US economic activity, also rose at an 11.3% annual rate in the first quarter, positioning the economy for strong growth as rising vaccinations eases COVID-19 pandemic’s grip.
That helps explain the 6.4% growth in GDP that was unchanged in the second estimate released last week.
The dollar index of major currencies rose 0.043% to 90.053 after making gains in early morning trading. The index is down 1.34% for the month.
The Aussie dollar ended the week around 77.15 US cents – that was steady over the month to last Friday.
MSCI’s broadest index of world stocks rose 0.31% to 711.15. It was up 1.4% for the month. European stocks gained 0.57% to 448.98 and 2.65% in May.
The Dow rose 0.19%, to 34,529.45, the S&P 500 gained 0.08%, at 4,204.11 and the Nasdaq Composite added 0.09%, at 13,748.74.
For the month, the Dow added 1.94%, the benchmark S&P 500 rose 0.55%, and the Nasdaq shed 1.53%.
Friday saw Tokyo’s Nikkei up more than 2%, ending the month 1.17% higher. MSCI’s measure of Asia-Pacific shares outside Japan rose 0.46% on Friday and a small 0.3% for the month.
So far, ‘sell in May and go away’ is working for the hands off, holiday investor.