CMC Markets Weekly Report

Wall Street attempted to stage a comeback on Friday however closed up only 4 points. The S&P managed a 0.2% gain to 1379. Initial gains in the market came from the fortnightly Michigan Uni consumer sentiment measure, which showed a reading of 84.9.

Over the weekend leaders of both sides of Congress were invited to the White House to begin discussions on the fiscal cliff. Corporations are struggling to hire until tax and spending policy changes have been determined for 2013. The longer it takes, the more likely Wall Street will react poorly.

Friday's release from Beijing showed Chinese inflation falling to 1.7% in October from 1.9% in September (year on year). Industrial production increased to 9.6% from 9.2% while retail sales grew 14.5% over twelve months and fixed asset investment is up 20.7% year to date.

The numbers support recent evidence that China's slowdown has found a bottom, suggesting a further slide into a hard landing is no longer a concern. The inflation number provides scope for further stimulus, but any action will likely only come after the new regime settles in next year. No one is expecting China to suddenly turn around and race up to double-digit growth again, nevertheless.

Tonight in the US is Veterans' Day in which banks and bond markets close but stock and commodity markets remain open. US economic data releases hot up from Wednesday when we see retail sales, the PPI, business inventories and the minutes of the last Fed meeting. Thursday it's the CPI along with both the Philly Fed and Empire State manufacturing indices, and Friday it's industrial production.

In Australia today we see housing finance and investment lending along with NAB's monthly survey of business confidence. On Wednesday it's Westpac's turn with consumer confidence.

Japan will announce its September quarter GDP today and the eurozone will follow suit on Thursday.