In our latest weekly market update, we start in the US, move to Europe and Asia and end in Australia as well as covering commodities and crypto, as a way of digesting all that has happened this past few days.
This past week, was again packed full of contradictory signals, with World stock indexes falling on Friday as a global cyber outage rattled investors by disrupting operations across multiple industries, while the dollar climbed alongside Treasury yields. All three US indices fell, as the S&P 500 and Nasdaq registered their biggest weekly percentage declines since April. while Gold briefly traded below $US2400 an ounce, oil fell 3 per cent to trade below $US83 a barrel and iron ore slid 1 per cent, while the second quarter earnings season is off to a mixed start.
A growing number of analysts and strategists are telling clients there is fragility among the stock giants having touched highs recently. Now the dilemma for investors is after 10 months of a big rally, should investors stick with their big winners or change tack remembering that history says wealth is created by a tiny number of companies, and most stocks will make investors poorer.
The market is overbought but analysts are split on whether the strong breadth improvements will be bullish for stocks moving forward or a rotation away from technology where most of the growth has been means markets will fall.
As with global stocks, concentration in the Asia-Pacific region is at 35-year highs, and CBA (which has been the fourth-largest contributor to returns in the region in the past 20 years, on BofA’s numbers) has been a prime mover; it is one of just eight stocks that have delivered 80 per cent of the gains in the MSCI Asia Pacific (excluding Japan) index this year.
There will be more madness ahead!!
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