Investment Matters

The markets

Markets 5 2 16


The US market was strong last Friday night, driven by (a) the Japanese Central Bank instigating negative interest rates, and (b) lower-than-expected US Q-4 GDP data, decreasing the likelihood that the US Central Bank (the 'Fed') would raise rates.

The Australian market had already had part of the Japanese sugar hit on the prior Friday afternoon, and thus the increase on our Monday wasn't as strong as the overseas lead in.    Overseas markets were mixed on our Monday night, but with lower oil and commodity prices and disappointing US manufacturing data.  This lead to a modestly negative day on our Tuesday. 

The oil price whiplash continued later on Tuesday night.  A price fall, and bad results from BP and ExxonMobil, impacted overseas markets negatively on the lead to our Wednesday.  This fed through to the Australian market, to a strongly negative day.  The oil price recovered somewhat on Wednesday night, but pressure on bank stocks and weaker than expected US services data dampened share market rises.  Australia's market bounced back on Thursday.  In fact, BHP and South32 (you own both) were up 8.3% and 14.2% respectively over the day - movements such as these highlight the perils of having a short-term focus on the market.

Thursday night saw the US market up slightly (+0.15%).  But, as at Friday lunch, the Australian market had gone back down, by 0.5%.