CMC Markets Weekly Report
Stocks in the U.S recouped some of their losses in a volatile trading session Friday but still finished lower as investors digested a handful of headlines from the euro zone and ahead of a key confidence vote in Greece.
Stocks in the U.S recouped some of their losses in a volatile trading session Friday but still finished lower as investors digested a handful of headlines from the euro zone and ahead of a key confidence vote in Greece.
The Dow Jones Industrial Average finished down 61.23 points, or 0.51 percent, at 11,983.24. The S&P500 and the Nasdaq also closed lower, finishing at 1,253.23 and 2,686.15 respectively.
Stocks were under pressure all day following comments from German Chancellor Angela Merkel, who said few countries in the G20 had committed to participating in Europe's bailout fund.
Greece continued to dominate headlines as Greek Prime Minister George Papandreou faced a confidence vote in Parliament that could determine whether his country will stay in the euro zone or leave the single currency and default on its debts.
Meanwhile, Greece's finance ministry said the nation has dropped its plans to hold a referendum, which had threatened to plunge the debt-ridden country into a crisis.
Movements in other markets were not substantial on Friday with the possible exception of oil. Brent crude rose another US$1.24 to US$111.97/bbl while West Texas added only US19c to US$94.26/bbl. Nickel rose 2% on Friday on lower inventories, while all other metals were mixed on minimal moves. The US dollar index ended the session up 0.3% to 76.98, gold fell US$8.10 to US$1755.40/oz and the Aussie has slipped slightly to US$1.0393.
On the economic front, U.S. employment rose 80,000 in October, which was less than a gain of 95,000 that economists had expected, but the jobless rate slipped to a six month low of 9 percent. In addition, an upward revision to the prior months' job gains pointed to underlying strength in the jobs market.
It will be a quieter week for economic data in the US this week. The highlights will be wholesale trade on Wednesday, the monthly trade balance and Treasury budget on Thursday, and the fortnightly consumer sentiment report on Friday. The Treasury will auction three and ten-year notes on Tuesday and Wednesday and thirty-year bonds on Thursday.
China will provide a data dump on Wednesday of its inflation, industrial production and retail sales numbers followed by a trade balance result on Thursday. The world will be relieved if the Chinese CPI shows further slowing of inflation growth.
Australian bank economists will release their reports this week, with ANZ kicking off the week with the ANZ job ads series today, the NAB business confidence report tomorrow, and the Westpac consumer confidence report on Wednesday. Today also sees the construction PMI, tomorrow the trade balance, and Wednesday housing finance and investment lending. On Thursday economists expect to see the unemployment rate tick up to 5.3% from last month's 5.2%.
November is the peak month for Australian corporate AGMs and there is a parade of them this week. Orica (ORI) will post its full-year result today, Westfield (WDC) will provide a quarterly update tomorrow, and on Wednesday CSR (CSR) and SP Ausnet (SPN) both post interim results. Santos (STO) will hold an Investor Seminar on Thursday.
Frequently Asked Questions about this Article…
U.S. stocks finished lower after a volatile session — the Dow fell 61.23 points to 11,983.24, the S&P 500 closed at 1,253.23 and the Nasdaq at 2,686.15. Markets were jittery after German Chancellor Angela Merkel warned that few G20 countries had committed to joining Europe’s bailout fund, and investors were also focused on a confidence vote in Greece that could affect the euro zone.
The confidence vote in Greece mattered because it could determine whether the country stays in the euro zone or risks leaving and defaulting on its debts. Greece dominated headlines and pressured markets, although the government said it had dropped plans for a referendum that had heightened crisis risks.
Chancellor Angela Merkel said only a few G20 countries had committed to participating in Europe’s bailout fund. That comment increased investor concern about the adequacy of international support for Europe’s debt problems and put pressure on global equity markets.
Commodity and currency moves were notable: Brent crude rose US$1.24 to US$111.97 per barrel and West Texas Intermediate gained US$0.19 to US$94.26. Nickel climbed about 2% on lower inventories, while gold fell US$8.10 to US$1,755.40 per ounce. The U.S. dollar index finished up 0.3% at 76.98 and the Australian dollar slipped to US$1.0393.
U.S. employment rose by 80,000 in October, below the 95,000 economists expected, but the unemployment rate fell to a six-month low of 9%. An upward revision to prior months’ job gains suggested underlying strength. For investors, the report offered mixed signals: softer payroll growth but a lower jobless rate and revised data indicating some improvement in the labour market.
Key items to watch this week include U.S. wholesale trade (Wednesday), the monthly trade balance and Treasury budget (Thursday), and consumer sentiment (Friday), plus Treasury auctions of 3‑, 10‑ and 30‑year notes. China releases CPI, industrial production and retail sales on Wednesday and its trade balance on Thursday. In Australia, look for ANZ job ads, NAB business confidence, Westpac consumer confidence, construction PMI, the trade balance, housing finance and investment lending, and a likely unemployment rate uptick to 5.3%.
November is peak AGM season and several Australian companies have scheduled updates this week: Orica (ORI) posts its full‑year result today; Westfield (WDC) provides a quarterly update tomorrow; CSR (CSR) and SP AusNet (SPN) post interim results on Wednesday; and Santos (STO) holds an investor seminar on Thursday.
Use the calendar of political events, economic releases and corporate results highlighted in the report to time information flow — for example, monitor the Greek confidence vote, upcoming U.S. and Chinese data, and scheduled Australian company results and AGMs. Staying informed about these headlines and scheduled events can help investors avoid reacting to single‑day market swings and better assess risks tied to commodities, currencies and specific companies mentioned in the article.
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