US weekly wrap: Dow hits historic high, Nvidia earnings awaited




The Dow starts this week on new ground after the record close on Friday left the best-known US market index above the 40,000 level for the first time in history.

Friday’s close, though, of 40,003.59 was less than the all-time high reached in trading on Thursday of 40,051.05 - the index later pulled back and ended that session well under the 40,000 level.

But all eyes will be on Nvidia’s quarterly report on Wednesday after the final bell - it will determine if the market’s current bullish momentum remains intact.

Friday, though, saw the Dow bounce to a day’s high of 40,011 - still well short of Thursday's peak - for a gain of 134.21 on the day, or 0.34%.

The S&P 500 - the main US market measure - had a different day, edging up by just 6.17 points or 0.12% to end at 5,3030.27, and the Nasdaq ended in the red at 16,685.97, a loss of 0.07% or 12.35 points.

For the week, the Dow was up 1.2%, marking its fifth straight weekly gain. The S&P 500 and Nasdaq climbed 1.5% and 2.1% respectively, marking their longest winning streak since February.

Walmart, Caterpillar, Chubb, and Valero Energy lifted the market and helped the S&P 500 remain positive.

Chubb shares added more than 3% on Friday and over 7% for the week after it was revealed Warren Buffett’s Berkshire Hathaway had taken a 6.7% stake in the company. Berkshire shares saw a more modest 1.2% rise for the week.

For the ASX, the overnight trading on the Share Price Index platform for the ASX 200 saw a 35-point gain for today - a huge turnaround from the gloomy day on Friday that saw the index off nearly 67 points or 0.85% for the session.

Friday’s slide, though, wasn’t enough to erase the week’s earlier gains, and the index ended up 0.84%.

After Thursday’s weakish labor force report for April, more Australian investors have joined the 'Rate Cut Looms' gang of enthusiasts who are driving Wall Street, UK, and European markets higher on similar expectations.

The growing enthusiasm for an early rate cut is driving global markets higher with key measures at record levels. But Friday saw a cooling with falls across much of Asia (but not Hong Kong and China where markets rose after the latest government support packages for property were revealed) and Europe as traders took profits ahead of the weekend.

Last week saw hopes for a US rate cut later this year rekindled by a slight easing in consumer inflation in April, though the producer price index was a touch higher.

While data reports recently have been better than forecast, “better than expected doesn’t mean good,” economists at Bank of America wrote in a BofA Global Research report on Friday.

Inflation is still higher than the Fed would like, and Bank of America economists still expect the Fed to hold its main interest rate steady until cutting in December (the general US belief is a cut in September).

In the bond market, the yield on the 10-year Treasury rose to 4.41% from 4.38% late Thursday. The two-year yield, which more closely tracks expectations for the Fed, edged up to 4.82% from 4.80%.

The US dollar ended high on Friday, and so did the Aussie which closed within sight of 67 US cents for the first time since the first fortnight in January.


Name Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.