CMC Markets Weekly Report
Stocks in the U.S. ended narrowly mixed Friday, erasing an earlier rally fuelled by the monthly government jobs report.
Stocks in the U.S. ended narrowly mixed Friday, erasing an earlier rally fuelled by the monthly government jobs report.
The Dow Jones Industrial Average gained 34.79 points, or 0.26 percent, to finish at 13,610.15 whilst the S&P500 erased 0.47 points, or 0.03 percent, to end at 1,460.93 and the Nasdaq fell 13.27 points, or 0.42 percent, to close at 3,136.19.
Trading volume is expected to be thin ahead of Columbus Day holiday on Monday (banks and the bond market will be closed, while the stock market will be open) and light economic data throughout the week.
Third-quarter earnings season kicks off in the U.S. this week, with Dow component Alcoa reporting on Tuesday, for further market direction. Financial giants JP Morgan and Wells Fargo are also expected to report earnings in the week ahead.
Stocks rose at the open following news that the unemployment rate fell to 7.8 percent, dropping below 8 percent for the first time in nearly four years, as employers added 114,000 jobs in September, according to the Labor Department.
Economists polled by Reuters forecast non-farm payrolls rose by 113,000 in September, versus 96,000 in August.
Also on the economic front, consumer credit increased by $18.1 billion to $2.726 trillion in August, after falling for the first time in nearly a year in July, according to the Federal Reserve.
Shares ended higher in Europe after ECB President Mario Draghi said that the central bank was ready to act and that its new bond-buying program had already helped ease market tension.
But worries over Spain continued after the country's Finance Minister Luis de Guindos said the nation does not need a bailout.
Oil prices pulled back to settle below $90 a barrel, after spiking nearly four percent in the previous session, amid a fragile global economy and uncertainty about Europe's debt crisis.
Gold fell US$9.10 to US$1781.30/oz and the Aussie is down 0.6 percent to US$1.0181. What is of concern is Australia's construction PMI result released on Friday. With 50 being neutral, a result of 40 means rapid contraction. Australia's construction PMI, showed a fall to 30.9 in September from 32.2 in August to mark the 28th month of going backwards.
In the week ahead, it will be a quieter week for the US economic data calendar, with the Fed Beige Book out on Wednesday and the trade balance on Thursday, followed by the PPI on Friday.
It is however, a bit busier in Australia where today we see the ANZ job ads series, tomorrow the NAB business confidence survey, and Wednesday the Westpac consumer confidence survey. Thursday we'll have our own jobs numbers for September.
The highlight in Europe and the UK will be a round of industrial production numbers this week. China will be back in business after its week-long holiday.
On the local stock front, Pharmaxis (PXS) will provide a quarterly result on Wednesday, while ERA (ERA) and Iluka (ILU) will get in early on Thursday with quarterly production reports
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Frequently Asked Questions about this Article…
The September jobs report showed employers added 114,000 jobs and the unemployment rate fell to 7.8% — the first time under 8% in nearly four years. Stocks initially rose on the news but finished the day narrowly mixed: the Dow rose modestly while the S&P 500 and Nasdaq ended slightly lower. Economists had forecast about 113,000 payrolls, so the print was roughly in line with expectations.
Trading volume is expected to be light ahead of the Columbus Day holiday. Banks and the bond market will be closed on Monday while the stock market will remain open, which often leads to thinner-than-normal volume and potentially higher short‑term volatility.
Third-quarter earnings season kicks off this week, with Dow component Alcoa scheduled to report on Tuesday. Financial giants JP Morgan and Wells Fargo are also expected to report later in the week, making financial sector results important for overall market direction.
Consumer credit rose by $18.1 billion in August to $2.726 trillion after a dip in July, according to the Federal Reserve. In the coming days investors should also watch the Fed’s Beige Book (Wednesday), the trade balance (Thursday) and the producer price index (PPI) on Friday for further economic color.
European markets gained after ECB President Mario Draghi said the central bank was ready to act and that its bond‑buying program had helped ease market tension. However, concerns remain about Spain’s sovereign stress even though Spain’s finance minister said the country does not need a bailout.
Oil pulled back to settle below US$90 a barrel after spiking nearly 4% in the prior session. Gold fell about US$9.10 to US$1,781.30 per ounce. The Australian dollar weakened roughly 0.6% to US$1.0181.
Australia’s construction PMI fell to 30.9 in September from 32.2 in August. With 50 considered neutral, a reading around 31 signals rapid contraction — the 28th straight month of decline — which is a cautionary sign for investors focused on the Australian economy and construction‑related stocks.
Locally, Pharmaxis (PXS) will release a quarterly result on Wednesday, while ERA and Iluka will publish quarterly production reports on Thursday. Regionally, Australia will publish ANZ job ads, the NAB business confidence survey, the Westpac consumer confidence survey and September jobs numbers. Europe and the UK will release industrial production figures, and China will resume market activity after its holiday.
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