Market Update: 21 May 2024
The ASX 200 wrapped up the week with a 0.8% gain, bolstered by positive news on multiple fronts. Thursday saw the index’s most substantial surge of 2024, following reports of Australian unemployment rising higher than anticipated in April. Although the jobless rate climbed to 4.1%, the economy added 38,500 roles, with part-time jobs driving the increase. Earlier in the week, the government unveiled its annual budget, emphasising cost-of-living relief and plans to stimulate spending across various sectors, contributing to market optimism.
In the US, markets closed the week with the Dow Jones, S&P 500, and Nasdaq up 1.2%, 1.5%, and 2.1%, respectively. Notably, both the S&P 500 and Dow Jones achieved historic milestones, crossing the 5,300 and 40,000 marks respectively, for the first time ever. The positive momentum was fuelled by easing inflation data, reigniting hopes for Federal Reserve rate cuts. With inflation slightly easing in April, investors welcomed the news, with stocks notching their longest weekly winning streak since February.
Meanwhile, European markets ended the week with a mixed tone, as the Euro Stoxx 50 and FTSE saw slight declines. Central bank officials’ cautious commentary tempered rate-cut optimism, with ECB representatives advocating for a prudent approach amidst lingering inflation concerns. In the UK, signs of a cooling labour market, including rising unemployment and easing wage growth, are likely to bolster the case for future interest rate cuts.
In Asia, Greater China/Hong Kong equity markets surged, with the Hang Seng and Shanghai Composite up 3.1% and 1.6%, respectively. China’s mainland shares rallied, particularly in the property sector, following policy adjustments aimed at stimulating homebuying. Japanese markets also ended the week positively, with the Nikkei up 1.4%, supported by tech firms and exporters, amidst steady currency performance.
Published 21/5/2024
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