A weak start for the ASX this morning which looks like it’s in the mood to have a worry session or two as it frets about rising energy and inflation costs, problems in China, rising interest rates, soaring house prices, Covid Delta and anything else analysts can throw up.
In short, the market is lost for a theme that it can grab and ride for a while.
Normally you would have though the ending of the hardest part of the Sydney lockdowns might be a positive story investors could run with but the mounting case numbers in Victoria are offsetting any enthusiasm about NSW.
Scattered local lockdowns remain in force in parts of NSW, its feared case numbers will start rising next week or the week after as people start mixing through Sydney again and those investors who look ahead know there’s an accounting due on Thursday with the September jobs and employment data to be released.
Cases numbers are climbing in Victoria, especially Melbourne and even though vaccination numbers are rising, they remain weak in WA, Tasmania and Queensland, so the re-opening will not be national and uniform, no matter what ScoMo barks about.
Against that background, the ASX 200 futures saw a 4-point loss on Saturday morning which in turn means a soft start to trading today and a meandering day’s activity.
That week futures performance was after Eurozone shares fell 0.5% on Friday and the US S&P 500 dipped a choppy session as a result of the messy jobs report for September.
Oil prices again rose, as did iron ore, so that will give some parts of the ASX a small platform to build on today
For the week US shares rose 0.8%, Eurozone shares rose 0.7% and Chinese shares rose 1.3%, but Japanese shares fell -2.5%.
The positive global lead saw Australian shares rise 1.9% led by energy, utility, financial and material shares.
The mixed US jobs report (which was much stronger than the headline data suggested) saw US bond yields end higher with the 10-year note finishing above 1.61% and looking to nudge higher.
This week’s US consumer and producer prices will see that rise tested and it wouldn’t surprise to see yields build higher after the CPI tomorrow and the PPI on Thursday.
The $A regained the 73 US cent level as the greenback traded sideways.
On Wall Street the 0.8% weekly rise for the S&P 500 leaves it just 3.4% away from its all-time record high.
The benchmark index ended Friday’s session at 4,391.34. The weekly gain followed a September slide of 4.8%. The S&P 500 is up 17% for the year to date.
As oil gained since late August and Hurricane Ida, the S&P 500 energy sector is up 25%. Energy was the lone sector to post positive performance in September and it rose 5% last week.
The energy sector comprises less than 3% of the S&P 500 but rising oil prices can raise fuel and other costs for companies such as transportation firms, while also threatening demand by leading consumers to pay more, such as for gas at the pump – petrol prices in the US are up 96% in the past year.
The major influence behind the rise for the week, however, was the deal in Congress for a short-term debt-limit extension.
BHP helped the local sharemarket to Friday’s 0.9% gain on Friday as the bourse shrugged off global economic worries to end the week higher.
The ASX200 finished Friday’s session at 7320.1, a gain of 1.9% for the week.
The mining sector lifted the index, however, with BHP finishing the session up 3% to $37.74. Fortescue was up 2.4% to $14.25. Rio Tinto shares jumped 4% to regain the $100 a share level.
