Originally published by Rivkin Securities
The S&P 500 surged 1.2% on Friday and the Dow Jones wasn’t too far behind with an 0.85% rise. The Nasdaq 100, however, was the standout with a 1.55% increase. Strong earnings reports by certain companies helped the index make such strong gains with chip maker Intel (NASDAQ:INTC) climbing 10.5% on a strong earnings report. The FTSE 100 and DAX also had positive closes on Friday.
Gold prices managed to just hold onto the US$1,350 per ounce level on Friday and US bond yields returned to three-year highs. The US 10-year yield is currently at 2.66% while the Australian 10-year is currently at 2.86% having been below 2.5% as recently as late November 2017. It is not entirely clear what the drivers of gold and bonds are at the moment as recent price action suggests scepticism about future interest hikes despite three rate hikes by the Federal Reserve anticipated for 2018. The expectation of increased US government borrowing as a result of the recently implemented tax cuts could be contributing to the higher bond yields.
Oil prices remain strong, with WTI crude currently trading at US$66.14 per barrel. Crude has climbed almost non-stop since mid-2017 despite many oil traders believing that prices would be capped not far above US$60 as a result of all the extra US shale production that would come online at that price level. In reality, although US shale production has increased, it hasn’t yet stopped the inventory drawdowns that have persisted for the last several months.
ASX 200 futures are up 30 points on the back of the strong performance of overseas equity markets on Friday. This week Australia’s CPI data will be released which is expected to show quarter on quarter growth of 0.7%. Early on Thursday morning the US Federal Reserve will decide interest rates for the next six weeks with no change expected from the current level of 1.5%.
Data Releases:
- No Significant Data