Opening Call: The Australian share market is to open higher.
U.S. stocks finished mostly higher after a surprisingly strong jobs report and a big gain in Amazon shares. The yield on the 10-year Treasury note rose to 1.91%, from 1.83% on Thursday. The WSJ Dollar Index rose 0.21% to 89.67. U.S. oil prices posted their highest finish since September 2014. And gold prices edged higher and registered their sharpest weekly gain in about three months.
Australia’s S&P/ASX 200 index closed another volatile session 0.6% higher, snapping a run of three weeks of losses. The benchmark shrugged off a weak lead from U.S. stocks. The heavyweight financial sector closed 0.8% higher. The tech sector added 1.1%, rebounding from the prior day’s heavy losses. The ASX 200 gained 1.9% for the week.
The S&P 500 and Nasdaq Composite rose, pushing major stock indexes to weekly gains, after a better-than-expected January jobs report showed the economy is still growing solidly. The technology-focused Nasdaq Composite Index jumped 1.6%, a day after the index posted its largest loss since September 2020. The S&P 500 climbed 0.5%. Both were bolstered by a 14% jump in shares of Amazon.com, which surged after the e-commerce giant said profit nearly doubled in the holiday period. The Dow Jones Industrial Average slipped 0.1%.
“Markets were afraid the Fed would raise rates at a time when the economy was rolling over and there were worries about policy errors,” said Jamie Cox, managing partner for Harris Financial Group. “What data like [Friday’s jobs report] suggests is that the Fed is adjusting monetary policy to adapt to the economy. Hyper-accomodative monetary policy is no longer needed.” Even with the Dow’s small loss, all three indexes finished higher for the week, extending their weekly winning streak to two. The Nasdaq notched a weekly gain of 2.4%, its largest weekly gain since late December. The S&P 500 rose 1.5% during the period, while the Dow gained 1%.
The Nikkei Stock Average rose 0.7% amid gains in U.S. stock futures and a mild weakness of the yen. Among the best performers were video game-related companies. Transport companies were also higher.
Gold futures edged higher, notching the steepest weekly gain since mid-November, following a stronger-than-expected monthly rise in the U.S. job market. April gold rose 0.2% to settle at $1,807.80 an ounce.
Oil futures rallied to tally a seventh-straight weekly rise, with the U.S. benchmark marking its highest finish since September 2014, as a harsh winter storm raged in the U.S., piling onto myriad supply worries. West Texas Intermediate crude for March delivery climbed 2.3% to settle at $92.31 a barrel on the New York Mercantile Exchange. That was the highest finish for a front-month contract since Sept. 29, 2014, according to Dow Jones market Data. April Brent crude, the global benchmark, gained 2.4% to $93.27 a barrel on the ICE Futures Exchange, marking the highest settlement since Oct. 2, 2014.
“The latest upswing was triggered by a cold snap in Texas, which is fueling concerns about production outages in the Permian Basin, the largest U.S. shale play. A year ago, a period of extreme cold weather had caused massive disruptions to oil production there,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note to clients.
Major currencies were weaker against the US dollar in European and US trade. The Euro fell from near US$1.1480 to near US$1.1410 and was near US$1.1445 at the US close. The Aussie dollar fell from near US71.50 cents to US70.50 cents and was near US70.75 cents at US close. And the Japanese yen eased from 114.75 yen per US dollar to JPY115.40 and was near JPY115.20 at US close.
European sharemarkets were weaker on Friday. Refinitiv reported “automobile stocks hit a one-month low (down 3.2%) on the prospect of tougher emissions tests, while a hawkish shift from the European Central Bank continued to rattle markets.” The pan-European STOXX 600 index fell by 1.4% to be down 0.7% over the week. The German Dax index fell by 1.8% and the UK FTSE index lost 0.2%. In London trade, shares in Rio Tinto fell 0.1% while BHP rose by 0.2%.
The Chinese stock exchanges were closed this week for holiday.