CMC Markets Weekly Report

Wall Street posted a strong performance on Friday night to end the best week of the year for US stocks. The Dow gained 93 points, the S&P added 0.8% to 1328 and the Nasdaq jumped 1.0%.

Wall Street posted a strong performance on Friday night to end the best week of the year for US stocks. The Dow gained 93 points, the S&P added 0.8% to 1328 and the Nasdaq jumped 1.0%.

The markets spotlight has been on Spain, preceding the next Greek election. Friday night's trade, and the gains accrued earlier in the week, were all about anticipation that Spain would join Greece, Ireland and Portugal on the list of eurozone bail-outs.

The weekend saw the Eurozone offering Spain a line of credit of up to E100bn. The Dow opened 96 points higher last night's however traded lower thereafter, resulting in the Dow closing down 142 points.

The fall was a result of the bad news evident within the Spanish bail-out. The problem is that the money is nothing more than another loan to Spain at a time when Spain is struggling to pay its existing debts. The funds will come from either the EFSF or ESM and those bodies lend only on the basis of being first in line for repayment.

In other words, Spanish bank bondholders and everybody in between down to equity holders have shuffled one rung down the subordination ladder with this new source of rescue funds.

Today in Australia brings the monthly NAB business confidence survey along with lending finance, while tomorrow sees Westpac's consumer confidence survey and the ABARES crop report for the June quarter.

UK will release its industrial production numbers tonight and the eurozone on Wednesday, while both will release trade balances on Friday. Japan will release its IP result on Thursday and the US will follow on Friday.

Prior to that the US will see retail sales and PPI on Wednesday, CPI on Thursday, and the Empire State manufacturing index and fortnightly consumer sentiment index on Friday.

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