CMC Markets Weekly Report

Stocks in the U.S. eased off their worst levels in the final hour of trading, but still finished firmly in the red Friday on the heels of a disappointing June government jobs report.

Stocks in the U.S. eased off their worst levels in the final hour of trading, but still finished firmly in the red Friday on the heels of a disappointing June government jobs report.

The Dow and the S&P 500 posted weekly losses, while the Nasdaq managed to eke out a gain for the fifth-consecutive week.

The Dow Jones Industrial Average tumbled 124.20 points, or 0.96 percent, to close at 12,772.47 whilst the S&P500 fell 12.90 points, or 0.94 percent, to end at 1,354.68 and the Nasdaq dropped 38.79 points, or 1.30 percent, to finish at 2,937.33.

Non-farm payrolls rose by 80,000 according to the Labor Department, missing expectations for a gain of 90,000 jobs, according to a Reuters poll. Meanwhile, the unemployment rate remained unchanged from May at 8.2%, in line with predictions.

With yet another month of weak employment growth, the second quarter marks the weakest three-month period in two years, fuelling optimism that the Federal Reserve will step in with additional monetary easing. Recent economic reports have been dismal, with the ISM manufacturing index earlier this week indicating a contraction for the first time in nearly three years.

The euro slumped below $1.23 against the U.S. greenback, to trade at a two-year low whilst the Aussie finished down 0.7 percent to US$1.0213.

The moves come a day after the ECB cut its rates by quarter of a point and slashed deposit rates to zero. In addition, the Bank of England moved forward with more quantitative easing, while the People's Bank of China moved forward with surprise rate cuts. Still, the central bank actions did little to lift equities.

Aside from falls in stocks and gold, the strong greenback helped base metals fall 2-3 percent and the oils to both fall around 3 percent. Indeed they were both down US$2.77, to US$97.93/bbl for Brent and US$84.45/bbl for West Texas.

It's a quiet week on the US economic data front, with Wednesday's trade data the only highlight ahead of Friday's PPI release. Trade balances are a feature this week, with all of Japan, Germany, China, the UK and US reporting.

The Fed will release the minutes of its last meeting on Wednesday night which, as usual, will be scoured for any QE3 clues.

We can look forward to a more significant data flow this week in Australia, which begins today with the ANZ job ads series. Tomorrow sees NAB's business confidence survey and Westpac's consumer confidence survey along with housing finance and investment lending numbers. On Thursday we'll see our own jobs numbers.

Chinese data will flow in the order of inflation today, the trade balance tomorrow, and retail sales, industrial production and the GDP on Friday.

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