Add Category
“We’ll have to see whether Santa Claus comes belatedly and provides a bit of guidance, but it has been a very difficult year for global sharemarkets [with] recession fears, higher interest rates, higher energy and commodity prices, and the war in Ukraine.”
Head of investment strategy and chief economist at AMP, Shane Oliver, said the movement in the US indicated a possible rise in Australia.
“There’s no guidance from the futures that you would usually get,” Oliver said.
“It’s still going to be messy [though] because we’re between Christmas and New Year...you’ve got low volume, not a lot of capital, not a lot of capital raising, and there’s no money being sucked out of the sharemarket.”
“And, at the same time, investors often feel a bit optimistic about the year ahead. So, the tendency is for the market to rise through this period.”
Wall Street had been expected to be buoyed by stronger than expected US holiday sales, with fresh data showing American spending remained resilient – reporting 7.6 per cent growth – during the critical shopping season despite surging prices on everything from food to rent, according to early economic indicators.
US shoppers helped fuel a jump in retail spending during the holiday period.Credit:AP
At the same time, early economic indicators for the Chinese economy show the loosening of the country’s COVID zero policy might be a mixed blessing. Bloomberg’s aggregate index of eight early indicators this week showed a contraction in activity in December from an already weak pace in November and the outlook is grim for the new year.
The price of iron ore is also headed for a modest weekly drop as a surge in COVID cases clouded the near-term demand outlook and undermined the effect of recent announcements of support for the real-estate sector.
Chinese steel mills are currently reducing production, Guangfa Futures said in a note, with data from an industry association showing output falling and stockpiles rising in the middle of this month.
– with wires
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.