CMC Markets Weekly Report

Stocks in the U.S ended narrowly mixed in another lacklustre session on Friday as volumes remained light on Wall Street. The Dow Jones Industrial Average slipped 1.74 points, or 0.01 percent, to end at 12982.95. The S&P500 gained 2.28 points, or 0.17 percent, to finish at 1,365.74, logging its best close in almost 3-1/2 years. The Nasdaq rose 6.77 points, or 0.23 percent, to close at 2,963.75.

US economic data, nevertheless, remains more positive than negative. The consumer sentiment index gained to 75.3 in February, its best level in almost a year, according to the Thomson Reuters/University of Michigan's final reading.

Meanwhile, new home sales declined 0.9 percent in January to a seasonally adjusted 321,000-unit annual rate which was better than expectations, according to the Commerce Department.

Oil prices on the other hand, settled near $100 a barrel, logging its fifth weekly gain, amid worries over cuts in Iranian supply. Brent oil was up another US$1.80 to close at US$125.47/bbl on Friday. Base metals were also relatively strong in London, posting gains of 1-2%.

Euro strength is acting as in indirect influence on commodity prices given offset weakness in the US dollar index, which was down 0.4% to 78.33. Gold has stalled again, falling US$7.90 to US$1772.40/oz, while the Aussie just seems to be hanging about at current levels, finishing at US$1.0701 on Friday night.

European shares ended higher, helped by strong company results and expectations that the European Central Bank will lend a vast amount to banks at next week's three-year refinancing operation.

Over the weekend, the G20 finance ministers met in Mexico City. High on the agenda was Europe, a push for even greater contributions to the EFSF (European Financial Stability Facility), and a call from the IMF for greater international contributions for the same reason.

On the economic front, Thursday we'll see private sector capital expenditure and expenditure intentions report, whilst Wednesday sees December quarter construction work done, and today with CBA's quarterly housing affordability gauge.

We'll also see January new homes sales, retail sales and private sector credit on Wednesday, and building approvals and the RP-Rismark house price index on Thursday.

Thursday is also global manufacturing PMI day, and Australia leads the charge ahead of China, the eurozone, UK and US.

There is some telling US economic data out this week, beginning with pending home sales tonight. Tuesday sees durable goods, the Richmond Fed manufacturing index, the Case-Shiller house price index and the monthly consumer confidence measure from the Conference Board. Wednesday it's the Chicago PMI, the Fed's Beige Book, and another revision of the December quarter GDP. That's expected to remain steady at 2.8%.

Thursday it's the aforementioned PMI, along with chain store sales, vehicle sales, personal income and spending and construction spending. If we don't know what shape the US economy is in by Friday we're not trying.

On the local stock front, this week brings an end to the Australian results season. It should end with the month on Wednesday but Woolworths (WOW) had to buck the trend and release its result on Thursday. Big names before that include Caltex (CTX), James Hardie (JHX), Boral (BLD), Harvey Norman (HVN), QBE (QBE) and WorleyParsons (WOR).