Nasdaq 100 Makes New Record High

The Dow Jones surged on Friday, climbing steadily throughout the session to eventually close 440 points (1.8%) higher. Likewise, the S&P 500 climbed 1.75%. The Nasdaq 100 was the star performer, however, as it rose 1.9% and made a new record high. This contrasts with the Dow and S&P 500 which are both still below their record highs from January of this year. Google parent, Alphabet, was one of the better performers, making a 3.0% gain for the day which brought it very close to a new record high. Some of the overall market optimism came from the very strong employment data released on Friday. The change in employment was a much better than expected gain of 313,000 jobs although average hourly earnings growth was lower than expected.

Oil prices surged almost $2 per barrel (for WTI) on Friday as a falling rig count and the strong employment data may have helped support prices. Oil inventories typically climb at this time of the year which has been the case for the last few weeks. A resumption of the longer term downward trend, however, would soon see US inventories at or below the five-year average. OPEC’s production has dropped recently as a result of falling Venezuelan and Nigerian output and the other OPEC members have decided not to offset these declines at least until the market is more balanced.  

Later this week, US CPI data will be released which will be closely watched for signs of increasing inflation. The market ‘tantrum’ from February was largely the result of increased inflation expectations and therefore the CPI data will be scrutinised as a key indicator of how inflation is running. Also this week, US PPI and retail sales data will be released. 

Data Releases:

-    No Significant Data

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This article was written by William O'Loughlin - Investment Analyst, Rivkin Securities Pty Ltd. Enquiries can be made via william.oloughlin@rivkin.com.au or by phoning +612 8302 3633.

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