FYI | Apr 01 2009
By Greg Peel
It’s that time of the year when we hope we haven’t been caught out by any silly stories and that time of the month when FNArena has a look at historical monthly trends, courtesy of the analysts at Barclays Capital.
And the good news is that – assuming history is any guide at all – the odds are stacked in favour of the All Ordinaries index finishing higher for the month of April. The odds for an advance are 79%, according to Barclays, which is a very high score. Over the past 30 years, the best ever monthly advance was 15.4% and the worst result was a 6.6% decline. The past three Aprils have all been winners (implying 2005 wasn’t).
Indeed of the 15 major world indices Barclays analyses, all of them show better than 50% odds of an advance in April ranging from the All Ords as top odds to India’s Sensex at 55%. The US S&P 500, analysis for which goes back to 1950, rates a strong 69% which is also heartening given Australia is unlikely to outperform if Wall Street is down the tubes.
On the commodities front, copper has had a three-year April winning streak but only shows 55% odds of advancing on the longer term scale. Natural gas has the highest April odds among commodities with 67% while oil rates almost even money at 52%. The worst performer of the major commodities is aluminium with only a 33% chance of a rise.
Gold is not convincing at 56% while silver’s chances are rather negative at 39%.
It’s a toss of the coin at 50% for whether the Aussie dollar goes up or down but the Kiwi dollar has the best odds of 17 different currencies pairs analysed by Barclays, showing a 61% chance of gaining over the month against the greenback.
On the fixed interest side of things, we find that Australian 10-year government bonds are also a chance to rise in price over April despite the stock market odds. Barclays measures the odds of a yield increase (price fall) on the Aussie bond at 39% (or call that 61% the other way around).
And there you have it. If history chooses not to repeat, don’t come looking for us.
