CMC Markets Weekly Report

Stocks in the U.S finished mixed Friday, as investors digested a handful of tepid earnings and economic reports in addition to ongoing jitters in the euro zone. The Dow Jones Industrial Average fell 74.17 points, or 0.58 percent, to finish at 12,660.46, whilst the S&P500 cut most of its losses but still slipped 2.10 points, or 0.16 percent, to end at 1,316.33. The tech-heavy Nasdaq added 11.27 points, or 0.40 percent, to close at 2,816.55.

Stocks in the U.S finished mixed Friday, as investors digested a handful of tepid earnings and economic reports in addition to ongoing jitters in the euro zone. The Dow Jones Industrial Average fell 74.17 points, or 0.58 percent, to finish at 12,660.46, whilst the S&P500 cut most of its losses but still slipped 2.10 points, or 0.16 percent, to end at 1,316.33. The tech-heavy Nasdaq added 11.27 points, or 0.40 percent, to close at 2,816.55.

Quarterly earnings results continue to draw Wall Street's focus. So far, only 59 percent of companies that have reported earnings so far on the S&P 500 have topped expectations, according to Thomson Reuters, much lower than usual.

Meanwhile, Facebook said it could file for an IPO as early as next Wednesday, with Morgan Stanley likely to be its main underwriter, according to the Wall Street Journal.

In economic news, U.S. GDP expanded at a 2.8 percent annual rate, according to the Commerce Department, logging its fastest pace in 1-1/2 years in the fourth quarter, but the figure was still slightly below expectations for a 3.0 percent gain.

Meanwhile, the consumer sentiment index rose to a 11-month high in January, climbing to 75, from December's reading of 69.9, according to a the University of Michigan survey.

In Europe, Greek Finance Minister Evangelos Venizelos said the debt-ridden nation is just "one step away" from a debt swap deal with its private creditors. Venizelos' statements echo an earlier comment from European economic affairs Chief Ollie Rhen who said a Greek debt deal is imminent and should be completed by the end of January.

Ratings agency Fitch said it is downgrading Italy, Spain, Belgium, Cyprus and Slovenia, in the face of the ongoing financial and economic headwinds from the euro zone's debt crisis.

Turning to other markets, the poorly received GDP result sent the US dollar index tumbling 0.7% to 78.85, pushing the Aussie up another 0.3% to US$1.0658 and gold up another US$15.40 to US$1736.70/oz. The weaker greenback provided a buffer for what might otherwise have been more dramatic pullbacks in base metal prices, but aside from a 1% fall in lead and a 2% fall in zinc, the metals were largely unchanged. Movements in the oil price were again muted as well, leaving Brent at US$111.46/bbl and West Texas at US$99.64/bbl.

In the week ahead, Facebook talk will no doubt dominate in the US as we begin this week, while there are still plenty of earnings results to come.

It's also a busy week for US economic data this week, beginning with personal income and spending tonight. Tuesday sees consumer confidence, the Chicago PMI and the Case-Shiller house price index, while Wednesday sees construction spending, the manufacturing PMI for January and the ADP private sector jobs numbers. Thursday is chain store sales and Friday brings factory orders, the service sector PMI and non-farm payrolls.

Wednesday is the first of the month so it's manufacturing PMI day across the globe, with all of Australia, China, the eurozone, UK and US reporting. Then they do it all again two days later with service sector PMIs.

Australia will also see the NAB business survey tomorrow along with private sector credit and the RP Data-Rismark house price index. Wednesday it's December quarter house prices, new home sales and the manufacturing PMI, Thursday sees building approvals and the trade balance and Friday the services PMI.

This week sees the last of the Australian resource sector production reports with ROC Oil (ROC) out today, and all of AWE (AWE), Ivanhoe (IVA), Murchison (MMX), Paladin (PDN) and Tap Oil (TAP) out tomorrow.

Companies reporting six-monthly earnings this week include Energy Resources of Australia (ERA) on Wednesday and News Corp (NWS) on Thursday.

Related Articles