This week the benchmark US stock index, the S&P500, made fresh all-time highs for the 62nd time in 2021.
Gains supported by strong September-quarter earnings and a dovish taper announcement from the Federal Reserve.
The ASX200 revolved around 7400, underperforming its peers as commodity prices, including iron ore and coal, slumped on growth concerns in China.
Here is a review of the top five things that happened in markets this week.
1. US September-quarter earnings season
September-quarter earnings reporting season continued with updates from Pfizer (PFE), Uber (UBER), Moderna (MRNA), and energy giants ConocoPhillips (COP) and Marathon Petroleum (MPC).
Pfizer smashed earnings expectations reporting Earnings Per Share (EPS) of $1.34 versus $1.08 expected on revenues of $24.1 billion versus $22.58 billion expected.
The Pfizer share price closed 4.2 per cent higher at $45.45 after the report.
2. FOMC meeting
The Federal Reserve announced it would start tapering its bond purchases at a rate of $15 billion a month and that it’s “prepared to adjust the pace of purchases if warranted by changes in the economic outlook”.
In response to a question on future rate hikes, chair Jerome Powell indicated he would remain “patient” and would like to see “maximum employment both in terms of employment and participation”.
3. RBA interest rate meeting
At its monthly board meeting on Tuesday, the RBA put an end to its “yield curve control” (YCC) policy and dropped its reference on the timing of a first hikes “not before 2024”.
However, the RBA remained dovish on inflation, a view the market is not entirely comfortable with, reflected by market pricing of a first RBA rate hike by the middle of 2022.
4. Energy prices ease
After a stunning two-month, 20 per cent rally, the price of crude oil fell below $80 for the first time since early October as EIA data showed inventories in the US rose by more than expected.
Politicians have become increasingly vocal that high energy prices are fuelling inflation and calling for the Organisation of Petroleum Exporting Countries and its allies (OPEC+) to increase supply.
5. Ethereum hits all-time highs
Ethereum, the second-largest cryptocurrency by market capitalisation, made headlines as it traded to a fresh all-time high at $4670.
Supporting gains, the Treasury-led President’s Working Group on Financial Markets (PWG) report on the regulation of stablecoins.
The report lays the framework for the possibility of a central bank-issued digital currency issued by commercial banks and overseen by regulators.
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