CMC Markets Weekly Report

Stocks in the U.S. turned higher in the final minutes of trading on Friday, with the S&P logging its sixth-consecutive rally, despite a disappointing Chinese trade report that raised worries over slowing global growth.

Stocks in the U.S. turned higher in the final minutes of trading on Friday, with the S&P logging its sixth-consecutive rally, despite a disappointing Chinese trade report that raised worries over slowing global growth.

The Dow Jones Industrial Average rose 42.76 points, or 0.32 percent, to close at 13,207.95. The S&P500 edged up 3.07 points, or 0.22 percent, to finish at 1,405.87 whilst the Nasdaq squeezed out a gain of 2.22 points, or 0.07 percent, to end at 3,020.86.

China's July exports rose just 1 percent from a year earlier, disappointing estimates by a wide margin and adding expectations that the Chinese central bank will take further policy steps to support an economy that has seen declining growth for six consecutive quarters.

These results prompted a predictable response from commodities markets. Base metals all fell around one percent in London and Brent crude fell US52c to US$122.95/bbl, although West Texas was steady at US$93.39/bbl.

The Aussie held strong despite the disappointing Chinese data falling 0.1 percent to US$1.0570. The US dollar index was all but steady at 82.55. Gold rose US$3.30 to US$1620.50/oz.

Also on the economic front, U.S import prices fell 0.6 percent in July for the fourth straight month, according to the Labor Department. Analysts had expected a gain of 0.1 percent. The unexpected decline could give the Federal Reserve more reason to ease monetary policy.

In the week ahead, Japan will report its June quarter GDP result today, and the eurozone will back up with its first estimate tomorrow. In Europe this week we'll also see industrial production data and the ZEW survey tomorrow, inflation on Thursday and trade balance on Friday.

The US will see business inventories, retail sales and the PPI tomorrow, and the CPI, industrial production, housing sentiment, and the Empire State manufacturing index on Wednesday. Thursday brings housing starts and the Philadelphia Fed manufacturing index, and Friday wraps with the Conference Board leading economic index and the fortnightly consumer sentiment survey.

The economic highlights for Australia this week will be the monthly NAB business confidence survey tomorrow, along with vehicle sales, and the Westpac consumer confidence survey on Wednesday. We'll also see the first of the June quarter data releases in the lead up to next month's GDP result, with the wage cost index out on Wednesday.

For Australia, nevertheless, the focus is on earnings results. Among the highlights today will be results from Downer-EDI (DOW), JB Hi-Fi (JBH), Newcrest (NCM) and UGL (UGL). There are too many through the rest of the week to list but the highlights include Commonwealth Bank (CBA) and Westfield (WDC) on Wednesday, AMP (AMP) and Wesfarmers (WES) on Thursday, and QBE (QBE) and Santos (STO) on Friday. National (NAB) will provide a quarterly update tomorrow and ANZ (ANZ) will follow suit on Friday.

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