Opening Call: The Australian share market is to open higher.
U.S. stocks fell despite the Commerce Department reporting strong household income and spending data. The yield on the 10-year Treasury ticked down to 1.63% as slipping global equity markets propped up the value of haven investments. The WSJ Dollar Index rose to 86.2. Oil prices fell as a coronavirus crisis in India continued to spark fears of weaker global oil demand. Gold prices edged lower amid a series of offsetting factors.
Australian Market
Australia’s S&P/ASX 200 closed 0.8% lower, but still completed its strongest monthly gain since November. The benchmark dropped at the open and declined steadily to its biggest one-day loss since March 30, with energy, tech and materials stocks leading falls.
US Market
U.S. stocks slipped Friday but posted monthly gains after a streak of strong earnings reports.
Investors spent much of April grappling with two competing dynamics: signs of a strong economic rebound, particularly in the U.S., and worsening Covid-19 cases elsewhere in the world that threaten to hamper the global recovery. Robust corporate earnings helped major indexes hit records throughout the month. Data have also been encouraging, with figures released Friday showing U.S. household income surged by a record 21% in March.
But more recently, a surge in Covid-19 cases in Brazil and India and signs of weakening in China’s manufacturing sector have sapped some of the investors’ optimism.
The S&P 500 ended the session down 0.7%. The Dow Jones Industrial Average fell 0.5% and the Nasdaq Composite declined 0.9%.
For the month, the S&P 500 added 5.2%, its biggest one-month gain since November. The Dow rose 2.7%, and the Nasdaq climbed 5.4%.
Commodities
Gold futures inched lower on Friday to post a loss for the week, on the back of strength in U.S. Treasury yields, but prices still scored their first monthly gain of the year.
Gold had “a challenging week and has been seeking direction given a number of conflicting factors, which include inflation, the U.S. dollar and U.S. GDP”, said Jeff Wright, chief investment officer at Wolfpack Capital.
Gold futures for June delivery fell 0.03% to settle at $1,767.70 an ounce. Based on the most active contracts, gold fell 0.6% for the week, but saw a monthly rise of about 3% – the first monthly climb of the year so far, according to FactSet data.
Oil Futures
Oil futures finished lower, with weakness tied to some worries over the global economic outlook, but prices tallied weekly, as well as monthly, gains as energy demand looked to pick up in developing countries.
Oil prices ended the month with a solid gain as “mostly upbeat economic data and good earnings results suggest the global recovery is gaining traction and potentially accelerating, which in turn has bolstered the demand outlook,” said Tyler Richey, co-editor at Sevens Report Research.
West Texas Intermediate crude for June delivery fell 2.2% to settle at $63.58 a barrel on the New York Mercantile Exchange. Based on the front-month contracts, WTI saw a 2.3% weekly rise and an April gain of around 7.5%.
On its expiration day, the June Brent crude contract fell 1.9% to end at $67.25 a barrel on ICE Futures Europe. It rose 1.7% for the week and 5.8% for the month.
Forex
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from highs near US$1.2120 to lows near US$1.2015 and was near US$1.2029 at the US close. The Aussie dollar fell from highs near US77.78 cents to lows near US76.96 cents and was near US77.11 cents at the US close. And the Japanese yen fell from near 108.73 yen per US dollar to JPY109.34 and was near JPY109.23 at the US close.
European Markets
European sharemarkets were mixed on Friday. The pan-European STOXX 600 index fell by 0.3% but ended in April 1.8% higher. The eurozone economy, as measured by GDP, contracted by 0.6% in the March quarter (survey: -0.8%) – its second technical recession in 12 months. The German Dax index lost 0.1%, but the UK FTSE index rose by 0.1%. London-listed shares of Rio Tinto -1.3%) and BHP (-1.1%) both fell.
Asian Markets
Earlier Friday, Chinese stocks ended the session mixed, as the renewable energy sector continued its recent upturn. However, weakness in mining companies, coal and steel producers offset the momentum. The benchmark Shanghai Composite Index fell 0.8%, while the Shenzhen Composite Index edged down by 0.3%. The ChiNext Price Index was the only gainer with a 1.3% increase. That extended the index’s rally to a fourth consecutive day.
Hong Kong shares fell, snapping a two-day upturn. The benchmark Hang Seng Index lost 2.0%, its largest one-day decline in over a month. Tech stocks led losses with Macau casino operators weighing further on the index.
Japanese shares slipped on position adjustment ahead of the country’s Golden Week holidays, with the Nikkei Stock Average closing 0.8% lower. Declines in U.S. stock futures and ongoing concerns over the surge of Covid-19 cases in Japan also contributed to lower local equities.
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