Opening Call: The Australian share market is to open higher.
Australia’s S&P/ASX 200 closed flat, as weakness in tech and consumer stocks offset gains elsewhere. The benchmark’s largest sector, financials, added 0.2%. The ASX 200 gained 0.4% for the week.
The S&P 500 hit a fresh record after Federal Reserve Chairman Jerome Powell stressed that the central bank shouldn’t overreact to a recent spike in inflation. The S&P 500 advanced 0.9% after Mr Powell’s highly anticipated speech at the virtual Jackson Hole conference. The record close for the S&P was also it’s first above 4500.
The technology-heavy Nasdaq Composite climbed 1.2%, also putting it at a record. The Dow Jones Industrial Average rose 0.7%. All three indexes were up for the week. Investors were monitoring Mr Powell’s speech for clues about when the Fed might start to scale back its easy-money policies. The central bank has been conducting $120 billion in monthly asset purchases to juice the economic recovery while holding its benchmark short-term interest rate near zero. Such policies have helped propel major stock indexes to all-time highs.
Minutes from the Fed’s late July policy gathering showed that many of the officials thought asset buying could start to slow down by the end of this year. This week, more regional Fed leaders made the case that it was time to pare back the central bank’s stimulus campaign.
Mr Powell reaffirmed that the central bank would begin tapering bond purchases later this year. While he didn’t say when exactly the process would begin, the Fed chair spent much of his speech explaining why he is still confident that the recent inflation surge would prove temporary and why the Fed shouldn’t rush to tighten monetary policy.
Gold futures settled back above the key $1,800-an-ounce mark, their highest in nearly four weeks after remarks from Federal Reserve Chairman Jerome Powell, at the Jackson Hole central-bankers symposium. “The speech was highly anticipated but it did not come with any real bombshells,” said Peter Spina, president and chief executive officer at GoldSeek.com.
“The remarks were measured. Not too hawkish, if anything a bit more on the dovish side,” he said. Mr. Powell “did not give any concrete details on a taper timeline, which helped to push gold back above $1,800 as the dollar remains weak.”December gold futures rose nearly 1.4% to settle at $1,819.50 an ounce, with the precious metal scoring a weekly gain of 2% based on the most active contract, according to FactSet data. The settlement was the highest since Aug. 2, FactSet data show.
Oil and natural-gas futures settled higher to tally strong gains for the week as a storm, now known as Hurricane Ida, threatened the U.S. Gulf Coast. Energy companies have been moving crews off platforms in the Gulf of Mexico. The Bureau of Safety and Environmental Enforcement reported Friday that personnel from a total of 89 production platforms – nearly 16% of the 560 manned platforms in the Gulf of Mexico-have been evacuated. An estimated 58.51% of current oil production, and about 48.79% of natural-gas production, in the Gulf, has been shut-in, the BSEE said.
West Texas Intermediate crude for October delivery rose 2% to settle at $68.74 a barrel on the New York Mercantile Exchange. The U.S. benchmark marked a more than 10% weekly advance, based on the front-month contract, according to Dow Jones Market Data. October Brent crude, the global benchmark, rose 2.3% to $72.70 a barrel on ICE Futures Europe, with the front-month contract logging a weekly rise of over 11%. September natural gas rose nearly 4.5% to settle at $4.37 per million British thermal units, with the front-month contract marking a weekly gain of more than 13%.
Major currencies were firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.1735 to highs near US$1.1800 and was near US$1.1795 at the US close. The Aussie dollar rose from lows near US72.35 cents to highs near US73.15 cents and was near US73.10 cents at the US close. And the Japanese yen rose from near 110.25 yen per US dollar to JPY109.77 and was near JPY109.80 at the US close.
European share markets were firmer on Friday led by a 1.9% lift in mining stocks. The pan-European STOXX 600 index rose by 0.4%. The German Dax rose by 0.4% and the UK FTSE index rose by 0.3%. In London trade shares in Rio Tinto rose by 1.7% and shares in BHP rose by 2.2%.
Earlier Friday, Chinese stocks finished the session mixed as traders weighed reports of incoming PBOC policy support and corporate earnings results. The benchmark Shanghai Composite Index rose 0.6%, while the Shenzhen Composite Index edged up 0.1%, both recovering from losses over the last session. But the ChiNext Price Index continued to decline, ending 0.2% lower. Metal producers and mining companies led the gains, which were offset by lingering weakness in consumer firms such as tourism agencies and food and beverage retailers.
Hong Kong stocks ended the session flat, with the benchmark Hang Seng Index edging 0.03% lower. Developers were the top winners, but drugmakers offset that upbeat momentum. Japanese stocks fell, weighed down by weakness in electronics stocks amid caution over the U.S. monetary policy outlook. The Nikkei Stock Average lost 0.4%. Australia’s S&P/ASX 200 closed flat, as weakness in tech and consumer stocks offset gains elsewhere. The benchmark’s largest sector, financials, added 0.2%. The ASX 200 gained 0.4% for the week.