CMC Markets Weekly Report

Stocks in the U.S. finished higher Friday, with the Nasdaq posting its best weekly gain in almost three months, helped by a round of encouraging earnings, a better-than-expected consumer sentiment report and despite weak GDP report.

The Dow Jones Industrial Average rose 23.69 points, or 0.18 percent, to finish at 13,228.31, crossing into positive territory for the month. The S&P500 added 3.38 points, or 0.24 percent, to end at 1,403.36, crossing above the 1,400 milestone whilst the Nasdaq climbed 18.59 points, or 0.61 percent, to close at to 3,069.20.

Stocks got a lift earlier this week after Federal Reserve Chairman Ben Bernanke reiterated that the central bank remains prepared to take action, if needed, to help the economy.

Consumer sentiment inched up slightly to 76.4 in April from 76.2 in March, according to the Thomson Reuters/University of Michigan's final reading. Meanwhile, economic growth in the U.S. slowed in the first quarter at a 2.2 percent annual rate from the fourth quarter's 3 percent growth, according to the Commerce Department.

Also on the economic front, employment cost edged up by 0.4 percent in the first quarter, according to the Labor Department, but was still lower than the expected gain of 0.5 percent.

European shares ended higher, fuelled by several encouraging earnings reports, which trumped S&P's overnight downgrade of Spain's credit rating.

Major currencies rose over the European and US sessions after soft economic growth figures left open the door for more economic stimulus. The Euro rose from lows around US$1.3155 to highs near US$1.3270 and ended US trade at US$1.3250. The Aussie dollar rose from lows around US103.50c to US104.75c and ended US trade near US104.70c. And the Japanese yen lifted from 80.89 yen per US dollar to JPY80.21 and was near the strongest levels in late US trade.

Benchmark crude oil prices were little changed on Friday. US Nymex crude rose by US38c or 0.4pct to US$104.93 a barrel and rose by 1.8percent on the week. London Brent crude fell by US9c to US$119.83 a barrel and rose almost 1 percent on the week.

Base metal prices posted modest gains on the London Metals Exchange on Friday in line with equities markets. Metals rose between 0.3-1.3 percent although nickel bucked the trend, easing by 0.6 percent. Gold rose for the fourth straight day on option-related buying with the June Comex gold futures price higher by US$4.30 or 0.3pct to US$1,664.80 an ounce.

This week will be an important one globally on the economic data front with the release of the monthly PMIs and of the latest US jobs numbers. Tomorrow is the first of the month which means all the manufacturing PMIs including those of Australia and China, although the May Day holiday in Europe means the eurozone's numbers will run a day behind this month. The service sector PMIs are released on Wednesday except for the eurozone's which will appear on Thursday.

The US will also see monthly personal income and spending tonight, followed by construction spending and vehicle sales tomorrow. Wednesday sees the ADP private sector jobs number along with factory orders, before Thursday brings chain store sales and Friday the non-farm payrolls result.

The ECB will make a monetary policy announcement on Thursday after a month which has seen Spanish and Italian bond yields rising once more to uncomfortable levels.

The RBA's May interest rate decision is due to be released tomorrow, with a rate cut widely tipped. Analysts will be looking for clues of a further rate cut in June. Australia's economic week otherwise features the two PMIs as noted as well as private sector credit, new home sales and the TD Securities inflation gauge all out today.

The resource sector quarterly production reports will continue to flow this week and Mirvac (MGR) will provide a trading update tomorrow, while the highlight of this week will be the first of the big bank earnings reports. ANZ Bank (ANZ) will release its interim on Thursday and Westpac (WBC) will follow suit on Friday.