Will this week see a repeat of Friday when shares surged globally for what turned out to be the best day in five months?
Another solid day of US third quarter reports – led by Goldman Sachs – plus rising commodity prices, better than expected US retail sales and no bad news from China offset underlying worries about inflation which were given a boost by three-year-highs for oil.
Eurozone shares rose a solid 0.8% on Friday and the US S&P 500 was up 0.7%. Reflecting the positive US lead ASX 200 futures were up 31 points, or 0.4%, meaning a positive start to trade later today for the ASX.
For the week US shares rose 1.8%, Eurozone shares jumped 2.5%, Japanese shares rose 3.6% and Chinese shares rose 0.04%. The positive global lead also saw ASX 200 rise by 0.6%.
Friday saw the ASX 200 finished Friday’s session up 0.7% to 7362.
Despite the higher inflation for August and the better-than-expected rise in retail sales of 0.7%, bond yields ended at 1.57% for the 10-year US Treasury – down from more than 1.63% early in the week.
The surge for most commodity prices helped push the $A back above 74 US cents where it closed at 74.29 cents.
Goldman Sachs Group shares jumped 3.8% and gave the Dow its biggest boost, as a record wave of dealmaking activity in the third quarter drove a surge in the bank’s earnings for the period.
Goldman’s report followed strong results from Bank of America, Morgan Stanley, JPMorgan and Citigroup last week.
Forecasts now call for third-quarter S&P 500 earnings to show a 32% rise from a year ago. The latest forecast, based on results from 41 S&P 500 companies and estimates for the rest, is up from 27% at the start of October, according to IBES data from Refinitiv.
Alcoa Corp shares surged 15.2% after the aluminium producer reported stronger-than-expected results, announced a $500 million buyback program and initiated a quarterly cash dividend. 13-year highs for the metal certainly helped Alcoa as well.
The Dow rose 382.2 points, or 1.09%, to 35,294.76, the S&P 500 gained 33.11 points, or 0.75%, to 4,471.37 and the Nasdaq added 73.91 points, or 0.5%, to 14,897.34.
The Dow was up 1.6% for the week, its biggest weekly percentage gain since June 25. The S&P 500 rose 1.8% and Nasdaq closed 2.2% higher.
The Dow sat 0.9% below its all-time high. The S&P 500 and Nasdaq Composite were 1.6% and 3.3% off record highs, respectively.
The S&P 500 is now up 19% year to date.
