A flat start to the week as global markets remain mixed

By Trevor Hoey. Published at Jul 20, 2020, in Market Wrap

The S&P/ASX 200 index (XJO) closed at 6033 points on Friday, up 114 points or 1.9% on a week on week basis following a particularly strong performance from the mining sector and a rebound in interest in the big four banks.

However, Friday’s gain of approximately 0.4% or 23 points was relatively moderate, and is fairly insignificant in terms of providing a lead as to how our markets will perform in the coming week.

Similarly, overseas markets were mixed at the end of last week, offering little direction as to how our markets will trade on Monday.

With scant macroeconomic data emerging this week we could see a significant focus on COVID progress, whether it be in the form of new cases or on a brighter note new vaccines.

The other key market moving news will stem from our politicians who will be providing a rundown on the state of the economy, as well as updating revisions to stimulus and assistance packages such as lending for small business, and JobKeeper and JobSeeker allowances.

While the allowances are expected to be extended until December at this stage, they could be on a scaled-down basis, a move that would likely reduce consumer spending, putting more pressure on businesses.

While there was some promising news towards the end of last week regarding trials, the likelihood of any near-term rollout of vaccinations remains extremely slim.

The ASX SPI200 futures index reflects the degree of uncertainty that prevails as we kick off a new week, up only two points to 6004 points.

24 hours

Markets in the Asia-Pacific region were mixed on Friday with the Hang Seng gaining 0.5% to close at 118 points while the Nikkei 225 closed down 0.3% at 22,696 points.

The Shanghai Composite finished slightly up at 3214 points.

The FTSE 100 was the best performing index in that region, gaining 40 points or 0.6% to close at 6290 points.

The DAX gained 0.3% as it pushed through the 12,900 point mark, edging its way towards 13,000 points which was broadly in line with where the index was before it hit the coronavirus cliff.

The CAC 40 shed 0.3% to close at 5069 points.

As has often been the case in the US, markets were mixed with the Dow down 0.2% to 26,671 points, while the NASDAQ gained 0.3% to push just above the 10,500 point mark.

The S&P 500 gained 0.3%, closing at 3224 points.

On the commodities front, gold finished the week strongly, closing at US$1812 per ounce after dipping below US$1800 per ounce on Thursday.

After an erratic week, the Brent Crude Oil Continuous Contract finished at US$43.14 per barrel, broadly in line with where it started the week.

Following three consecutive days of nominal declines, the copper rally may have commenced again as it finished the week at US$2.93 per pound.

It was a different story for nickel, zinc and lead as those metals all trended south on Friday.

The Australian dollar broke through the US$0.70 mark on Wednesday but retraced slightly on Thursday before finishing the week close to US$0.70 after a strong rally late in the piece on Friday.

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