CMC Markets Weekly Report
Weaker PMI readings in China, US non-farm payrolls for May and continuing doubts over European banks and government meant markets slashed the prices of shares and risk commodities last week and bought US dollars and gold.
Weaker PMI readings in China, US non-farm payrolls for May and continuing doubts over European banks and government meant markets slashed the prices of shares and risk commodities last week and bought US dollars and gold.
The Dow Jones Industrial Average dropped 274.88 points on Friday night, or 2.22%, to close at 12,118.57. The broader S&P500 fell 32.29 points, or 2.46%, to 1,278.04, while the Nasdaq lost 79.86 points, or 2.82%, to 2,747.48.
No sectors were spared on Friday night, but Financial and consumer discretionary stocks fared worst as confidence in credit markets and consumer activity plunged.
This week all the action is in predictions for what the Reserve Bank might decide on Tuesday.
On Monday, We'll have inventories and company profits, plus there's ANZ Job Ads at the same time. Tuesday it's "global services PMI day" plus the Reserve Bank meeting in Australia. Australian data releases on Tuesday include exports and the current account.
On Wednesday we will be watching the ECB, while the Fed will release its Beige Book. In Australia, we will see the release of Q1 GDP growth estimate, while Europe will also reveal its own Q1 GDP number plus German industrial production for April.
On Thursday we will look at the official labour market data, while this time the Bank of England will have something to say about QE, inflation and interest rates. The US will see an update on consumer credit.
On Friday we have housing finance and trade balance for April in Australia and Q1 GDP in Japan. On Saturday we will see inflation, retail sales industrial production and trade balance data out of China.
Frequently Asked Questions about this Article…
Last week markets reacted to weaker PMI readings out of China, US non‑farm payrolls for May and continuing doubts over European banks and governments. That combination pushed investors to sell shares and risk commodities and rotate into safe havens like the US dollar and gold.
US markets fell sharply on Friday: the Dow Jones Industrial Average dropped 274.88 points (2.22%) to close at 12,118.57, the S&P 500 fell 32.29 points (2.46%) to 1,278.04, and the Nasdaq lost 79.86 points (2.82%) to 2,747.48.
Financials and consumer discretionary stocks fared worst as confidence in credit markets and consumer activity plunged. No sector was spared on the day, but concerns about credit and spending hit those two sectors especially hard.
Faced with weaker economic data and worries about European banks and governments, investors sought safe-haven assets. That risk‑off sentiment led to buying the US dollar and gold as stores of value while selling riskier assets.
This week’s calendar is busy: Monday brings inventories, company profits and ANZ job ads; Tuesday is global services PMI day and the Reserve Bank meeting in Australia (plus Australian exports and the current account); Wednesday has the ECB, the Fed’s Beige Book, Australia’s Q1 GDP estimate, Europe’s Q1 GDP and German industrial production for April; Thursday includes official labour market data, a Bank of England update on QE/inflation/interest rates and US consumer credit; Friday features Australian housing finance and trade balance for April and Japan’s Q1 GDP; Saturday will bring China’s inflation, retail sales, industrial production and trade balance.
Markets are centering on predictions about what the Reserve Bank might decide on Tuesday, making the meeting a key potential market mover. Investors will be watching the RBA for any guidance that could affect interest rate expectations and market sentiment.
PMI and GDP releases are primary indicators of economic health — the article notes weaker PMI readings in China weighed on markets. Stronger or weaker-than-expected PMI/GDP prints this week could shift risk appetite, affecting stocks, commodities and currencies.
China’s key data are scheduled for Saturday and include inflation, retail sales, industrial production and the trade balance. These releases are closely watched for signs of activity in the world’s second‑largest economy and can influence global markets.
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