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Stocks in the U.S. and Europe ended near session highs on Friday following news that a group of euro zone finance ministers have approved the next round of aid for Greece and amid optimism over the euro zone ahead of the EU summit.

By ·
24 Oct 2011

Stocks in the U.S. and Europe ended near session highs on Friday following news that a group of euro zone finance ministers have approved the next round of aid for Greece and amid optimism over the euro zone ahead of the EU summit.

The Dow Jones Industrial Average jumped 267.01 points, or 2.31 percent, to finish at 11,808.79. The S&P500 rallied 22.86 points, or 1.88 percent, to end at 1,238.25 whilst The Nasdaq gained 38.84 points, or 1.49 percent, to close at 2,637.46.

France and Germany said in a joint statement that European leaders would discuss a global solution to the crisis on Sunday, but no decisions would be adopted before a second meeting by Wednesday at the latest.

Meanwhile, President Obama announced that all American forces will be withdrawn from Iraq by year end, but traders said the statement was largely uneventful for the markets.

The euro, being the focal point at present, rose 0.7% on Friday to send the US dollar index down 0.9% to 76.27. Dollar weakness explains an US$18.80 rise for gold to US$1640.00/oz, but base metal activity was quite extraordinary.

On Thursday night, copper fell 5.5% on fears a Chinese clampdown on grey market loans using copper as collateral would mean a lot of sudden selling of the metal. The fall in the dollar saw support from metal markets and copper's subsequent rebound on Friday finishing up 5.2%. Everything else was up 1-7%. By contrast, the oil markets didn't do much at all on Friday night, trading at US$87.25 per barrel. The Aussie dollar was up a cent to US$1.0352.

This week sees another slew of US earnings reports, with highlights including Amazon, ConocoPhillips and Ford, Dow components 3M, DuPont, US Steel, Boeing, Merck, Exxon, Chevron and Proctor&Gamble, and foreigners Deutsche Bank, UBS and Credit Suisse.

On the economic data front, tonight kicks off with the Chicago Fed national activity index. Tuesday sees both the Case-Shiller and FHFA house price indices, the Richmond Fed manufacturing index, and Conference Board consumer confidence, while Wednesday brings durable goods and new home sales.

On Thursday, the first estimate of US September quarter GDP will be released. Following from 1.3% growth in June, economists are expecting 2.3% (annualised). Thursday also sees pending home sales, and then Friday wraps up with personal income and spending and fortnightly consumer sentiment.

Today HSBC will release its “flash” estimate of China's October manufacturing PMI.

Locally on the economic front, today sees the PPI, tomorrow the Conference Board leading index and Thursday the all important release of the September CPI. Also on Thursday National Bank (NAB) will release its FY11 result, and on Friday Macquarie Group (MQG) will provide its half-year result.

There will be a wave of AGMs this week in Australia while quarterly reports will be forthcoming from Oil Search (OSH) on Tuesday, Beach Energy (BPT) and Macarthur Coal (MCC) on Wednesday, Austar (AUN), PanAust (PNA) and Woolworths (WOW) on Thursday, and Paladin Energy (PDN) on Friday.


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