Weekly wrap: Wall Street follows Australia higher for once
WEEKLY MARKET REPORT
For once, Wall Street decided to take the lead from Australia leading into Easter, with our higher close on Thursday mimicked by the world’s biggest share market.
The ASX 200’s 0.8% jump on Thursday to 7819.1 points was followed by a more muted 0.1% rise in the S&P 500 to 5,282.70 points.
Naturally, Easter brought some challenges of its own as US President Donald Trump continued to make significant announcements.
Trump threatens to sack Powell
Perhaps the most important was his attack on the Federal Reserve chair Jerome Powell who had the temerity to hold interest rates steady at the latest meeting – at the same time exhibiting the Federal Reserve’s political independence.
That didn’t go down too well with President Trump who said: “If I want him out, he’ll be out of there real fast, believe me.”
That’s not the sort of message that financial markets find encouraging – particularly bond markets – but hopefully cooler heads will prevail and Jerome Powell will remain in the job Trump appointed him to until the end of his five-year term in May 2026.
On the positive side, Trump said he was “100% confident” that he could pull off a trade deal with the European Union after a good meeting with Italian Prime Minister Giorgia Meloni.
He is also confident of making a deal with the Chinese but that seems to be a lot further away.
Energy, miners and real estate drive ASX higher
Here in Australia the factors driving our market included a rally in energy stocks, consumer staples, real estate stocks and gold miners continued to rise in concert with the gold price.
One of the more interesting stocks on the Australian market what is BHP (ASX: BHP), with shares in the big miner up 1.1% after the company reported record production of iron ore and copper.
While investors may be wary about Chinese growth due to the tariff war with the US, BHP chief executive Mike Henry said China held the key to avoiding a world recession.
“Despite the limited direct impact of tariffs on BHP, the implication of slower economic growth and a fragmented trading environment could be more significant,’’ said Mr Henry. “China’s ability to shift toward a consumption-led economy and for trade flows to adapt to the new environment will be key to sustaining the global outlook,” he said.
One stock still struggling is Star Entertainment (ASX: SGR), which fell 9.1% on Friday as investors pulled out of the flailing casino operator.
Gold was the star of the show though with the 3.5% rise in the gold price pushing up shares in Northern Star (ASX: NST) by 1.2% and Evolution Mining (ASX: EVN) by 1.7%.
Shares in global software company WiseTech (ASX: WTC) slumped by 2.2% after ASIC revealed it is formally investigating founder Richard White’s share trading, and the company’s market disclosures.
Small cap stock action
The Small Ords Index rose 2.3% this week to 2986.2 points.
ASX 200 vs Small Ords
The week ahead
Not all of the economic events in the coming weeks will revolve around President Trump’s tariff deals, although our share market will be closed on Monday for Easter and Friday for Anzac Day.
Here in Australia jobs data will be closely watched with most analysts predicting an extra 45,000 jobs will be added in March.
The Reserve Bank Board’s April meeting minutes will also be out on Tuesday, giving reasons for why it held rates steady.
Also central for Australia will be economic growth figures out of China, which are expected to reach 1.4% for the March quarter as the Chinese economy continues to slowly pull out of its post COVID slump.
The European central bank will release its interest rate decision on Thursday, with most analysts tipping a 25-basis point cut to 2.25%.