The Australian market was flat last week as the busy corporate earnings season kicked on. Chinese iron ore futures rose to a five-month high and helped mining stocks higher, but it wasn’t enough to lift the market well into the black. Investors were eyeing the upcoming meeting at Jacks on Hole between U.S. Federal Reserve Chair Janet Yellen and other global central bankers for any hint as to the direction of monetary policy. On a sector level, the best performers were energy, materials and industrials. The worst performers were information technology, health care and consumer discretionary.
In global markets, Wall Street was higher despite some caution around geopolitical tensions and ongoing domestic political turmoil. President Donald Trump’s strategist Stephen Bannon departed the White House and there were also rumours that Trump’s economic adviser Gary Cohn might resign.
Investors digested a threat from Trump to shut down the government if Congress fails to fund a Mexico border wall. The idea was played down though and investors instead focussed on the strong earnings quarter, steady economic growth, and slightly more attractive valuations following recent sell-offs which drove Wall Street higher.
European markets were mostly higher as optimism returned in the lead up to the Jackson Hole meeting and the weaker pound helped British exporters. Asian markets were also mostly higher on improved sentiment and a firmer U.S. dollar.
The Australian dollar was mixed against major global currencies this week and fell below US79c as investor’s awaited news out of Jackson Hole and on better than expected U.S. jobless claims.