Market SummaryAsia
Asian markets had a somewhat rocky week, mostly due to the volatility from the technology sector and the overnight signals from U.S. markets. Japan’s Nikkei did well however, helped by a weaker Yen and the news that Japanese Prime Minister Shinzo Abe was not involved in the Japanese land sale scandal that has been weighing on investors minds. Rising in 4 of the 5 sessions for the week, the Nikkei added 4%, making it the best performing major global index. South Korea’s Kospi also did well despite the ongoing issues in the technology sector, ending the week with a 1.2% gain. Also rising for the week by 0.6% was the Shanghai Composite in mainland China; however Hong Kong did not follow suit, and closed the week with a 0.4% loss. Australia’s S&P/ASX 200 continued to suffer from troubles in its banking sector, and lost 1.1% for the week.
Asian markets actually ended the previous week on a high note, with most gaining in the last two sessions of the week. With uncertainties over a global trade war receding, and news afoot that North Korea is ready to talk to global leaders, potentially dismantling its nuclear weapons program, we could see a strong week from Asian equities. Japan will certainly do well if the Yen continues to soften, and China could put in gains now that the issue of a trade war has been almost put to rest. Technology stocks also seemed to be recovering late last week, which will help both Hong Kong and South Korea. Australia could remain under pressure however as commodities have shown weakness, and their banking sector will almost certainly remain a problem.
Europe
Despite getting off to a bad start, European markets didn’t perform too badly in the holiday shortened week. In fact, with the exception of Germany’s DAX, major indices climbed higher in the final three sessions of the week. And even though the DAX had a pullback Thursday, it still outperformed the European region for the week, rising by 1.8%. Both the Stoxx Europe 600 and CAC 40 in France managed 1.4% weekly gains, but the best gains came from the U.K., where the FTSE finished the week 2.0% higher thanks to weakness from the Pound. The weekly gains weren’t enough to save the month of March however, with both the Stoxx Europe 600 and the FTSE ending with a 2.3% loss in March.
European markets will remain closed on Monday for the Easter holiday, but after putting in three consecutive winning sessions to close out last week, we can imagine that Europe and the U.K. will kick the coming week off with gains. That is barring any new troubling news from the U.S., which isn’t out of the question as President Trump seems to enjoy surprising markets. For the time being things look quiet however, and that could add up to a good week for equities in the coming week.
US
U.S. markets began the week with stunning gains as the technology sector looked to rebound, but the rest of the holiday shortened week was mixed, although Wall Street did end the week on an upbeat note, rallying late in the session to solid gains. For the week the Dow Industrials outperformed, gaining 2.3%, but the S&P 500 wasn’t far behind as it tacked on 2.1%. The technology heavy Nasdaq was the clear underperformer as it gained just 1.1% for the week. The monthly picture was far less encouraging, as U.S. markets struggled in March. On a monthly basis the Nasdaq lost 2.9% in its worst monthly performance in over 2 years, while the S&P 500 fell 2.7% and the Dow had the worst performance due to the trade war issues and lost 3.5% in march.
With most issues now far more settled we could see a recovery coming from U.S. markets this week. Global trade war fears have calmed, and investors are counting on a meeting between President Trump and North Korean leader Kim Jong Un. U.S. economic data has remained upbeat as well. One question mark is the upcoming earnings season, which will kick off this week, and could put markets in another funk if earnings disappoint.
Gold/Crude Oil
The luster is fading from gold as it gave up a monthly gain by falling 2.1% last week. For March gold was 0.3% lower, and it held onto a slim 0.7% quarterly gain, its smallest quarterly gain in seven years. With many fears laid to rest and risk appetite returning to markets, the haven demand for gold is drying up. The U.S. dollar has also been on the rise, and that would be bad news for gold.
Crude had a bad week, but a good month and quarter; and with OPEC signaling it could take action to keep crude prices rising throughout 2018 we could see a better week ahead for crude. Lasst week the West Texas Intermediate contract fell 1.4%, but it held onto a 5.6% gain for the month of March, and was 7.7% higher in the first quarter of the year. The week ended on a high note, so look for continued gains as traders return to the pits this week.