CMC Markets Weekly Report

Stocks in the U.S. finished higher Friday, with the S&P 500 posting its highest close since December 2007, following a better-than-expected ISM non-manufacturing index and a monthly government jobs report that showed gradual improvement in the labour market.

Stocks in the U.S. finished higher Friday, with the S&P 500 posting its highest close since December 2007, following a better-than-expected ISM non-manufacturing index and a monthly government jobs report that showed gradual improvement in the labour market.

The Dow Jones Industrial Average gained 43.85 points, or 0.33 percent, to end at 13,435.21, whilst the S&P500 added 7.10 points, or 0.49 percent, to finish at 1,466.47. And the Nasdaq eked out a gain of 1.09 points, or 0.04 percent, to close at 3,101.66.

Stocks surged earlier this week, as Wall Street cheered the last-minute budget deal by lawmakers to avert the fiscal cliff that would have pushed the economy into recession.

On the economic front, U.S. employers added 155,000 jobs in December, according to the Labour Department, mostly in line with analysts' expectations and slightly below the level for November. The unemployment rate edged higher to 7.8 percent.

The services sector grew at its fastest pace in 10 months in December, according to the Institute for Supply Management. Meanwhile, factory orders were flat in November, according to the Commerce Department.

The Aussie dollar was buoyed by robust US economic data, buying 104.43 US cents on Friday. The Aussie has also hit a fresh four-year high against the Japanese yen, trading at 92.32 yen, just down from its early level of 92.49 yen, its highest level since September 2008.

Oil prices were mixed on Friday, with the New York WTI higher on data showing crude supplies unexpectedly shrank sharply in the United States, the world’s biggest oil consumer.

New York’s main West Texas Intermediate contract, light sweet crude for delivery in February, rose 17 cents from Thursday to close at $US93.09 a barrel. In London trade, Brent North Sea crude for February settled at $US111.31 a barrel, down 83 cents.

Gold closed lower for a sixth straight week on Friday, its longest losing streak in eight years. Gold lost $US25.70 to settle at $US1648.90 an ounce. It’s now eight per cent below the recent peak of $US1792 an ounce it reached on October 4. Gold rose as high as $US1900 an ounce in August 2011.

In the week ahead, there is no economic data due to be released today in Australia or the U.S.

Tuesday we can expect trade balance figures for November, and retail sales and job vacancies figures for November will be published on Wednesday.

On Thursday, building approvals are tipped to show a large swing, from minus 7.6 percent in October to plus 2 percent in November.

In the U.S. small business confidence and consumer credit will be released on Tuesday, and weekly mortgage applications along with oil inventories on Wednesday.

Thursday we’ll see jobless claims and on Friday international trade, import and export prices will round off the week.

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