CMC Markets Weekly Report
Last Friday European shares fell after the German Chancellor appeared to rule out using the European Central Bank to conduct a European quantitative easing program.
Last Friday European shares fell after the German Chancellor appeared to rule out using the European Central Bank to conduct a European quantitative easing program.
US shares ended mixed in thin trading on Friday as investors weighed positive economic data with continuing uncertainty about the rocky outlook for Europe's economies.
There was also a degree of pessimism given Wednesday night is the deadline for a resolution from the 12-member bipartisan super-committee that has been given the task of finding sufficient US budget cuts to avoid another debt ceiling breach ahead. A failure by the committee to arrive at a resolution could spark another US credit rating downgrade.
The US leading index rose by 0.9pct in October, well above the consensus estimate of an increase of 0.6pct.
It's a short week in the US this week with given the Thanksgiving holiday on Thursday. Tonight we will see existing home sales and the Chicago Fed national activity index. Tuesday brings the Richmond Fed manufacturing index, as well as another revision of the US September GDP. Wednesday sees durable goods, personal income and spending and consumer sentiment.
On Thursday the Fed will also release the minutes of its last monetary policy meeting.
All US markets are closed on Thursday and on Friday the NYSE has a half-day, closing at 1pm local.
In Australia the Conference Board will provide its September leading index and September quarter construction work done on Wednesday.
In China we will see HSBC's flash estimate of China's November manufacturing PMI.
Frequently Asked Questions about this Article…
European shares fell after the German Chancellor appeared to rule out using the European Central Bank to conduct a European quantitative easing (QE) program. For investors, that reduces the likelihood of additional ECB stimulus aimed at supporting euro-area growth, which can weigh on European stocks and investor sentiment.
US shares finished mixed as investors balanced encouraging US economic data with ongoing worries about Europe's economic outlook. Trading volumes were light—often called thin trading—partly because it was a holiday-shortened week, which can amplify price moves and contribute to mixed market performance.
The 12-member bipartisan super-committee has a Wednesday deadline to agree on enough budget cuts to reduce the risk of another debt ceiling breach. If the committee fails to reach a resolution, it could increase the risk of a US credit rating downgrade, a development that would likely raise borrowing costs and unsettle markets.
The US leading index rose 0.9% in October, beating the consensus estimate of a 0.6% increase. For investors, a stronger-than-expected leading index suggests improving near-term economic momentum, which can support corporate earnings expectations and influence asset allocation decisions.
Key US releases this week include existing home sales and the Chicago Fed national activity index (out tonight), the Richmond Fed manufacturing index and a revision of September GDP on Tuesday, durable goods, personal income and spending, and consumer sentiment on Wednesday, and the Federal Reserve’s minutes from its last policy meeting on Thursday.
US markets are closed on Thursday for Thanksgiving, and the NYSE will have a half-day on Friday, closing at 1pm local time. Investors should factor the shortened schedule and typically lighter liquidity into trading and execution plans.
In Australia this week, the Conference Board will publish its September leading index and the September quarter construction work done figures on Wednesday. These releases provide insight into near-term economic direction and construction activity.
Investors should watch HSBC’s flash estimate of China’s November manufacturing PMI. As a timely gauge of Chinese factory activity, the PMI can influence global growth expectations and commodity demand, which in turn affects international markets and resource-related investments.
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