CMC Markets Weekly Report

Stocks in the U.S. finished largely unchanged in lacklustre trading Friday, as investors remained on the sidelines ahead of next week's flurry of earnings reports.

Stocks in the U.S. finished largely unchanged in lacklustre trading Friday, as investors remained on the sidelines ahead of next week's flurry of earnings reports.

The Dow Jones Industrial Average eked out a gain of 17.21 points to close at 13,488.43 while the S&P500 erased 0.07 points to end at 1,472.05, a day after finishing at its best level in nearly five years. The Nasdaq rose 3.87 points, or 0.12 percent, to finish at 3,125.63.

Wall Street got its first look at big bank earnings, with Wells Fargo edging past earnings expectations. Revenue of $21.9 billion was about in line with expectations. However, traders reacted negatively to a report amid disappointment with the profit margin in the bank's lending business.

On the economic front, import prices slipped 0.1 percent in December, according to the Labor Department. And the trade deficit unexpectedly increased 16 percent in November to $48.7 billion, according to the Commerce Department. Economists polled by Reuters expected the deficit to decline to $41.3 billion.

On the commodities market, world oil prices fell Friday, as investors booked profits from the previous day’s rally amid sluggish global economic growth. New York’s main West Texas Intermediate (WTI) contract, light sweet crude for February, settled 26 cents lower at $93.56 a barrel and in London, Brent North Sea crude for delivery in February closed at $110.64 a barrel, down $1.25 from Thursday’s close.

Gold fell as traders cash out after a rise on speculation that further monetary easing from the European Central Bank (ECB) is unlikely. The most actively traded contract, for February delivery, was recently down $US18.80, or 1.1 per cent, at $US1,659.20 a troy ounce on the Comex division of the New York Mercantile Exchange.

Base metals on the London Metal Exchange (LME) closed mostly lower following downbeat news from top industrial metal consumer China, with opinions differing on the near-term outlook for the complex. At the close of open-outcry trading on Friday, LME three-month copper closed 0.8 per cent lower on the previous settlement at $US8,045 a metric ton.

The US dollar was mixed against major currencies in European and US trade on Friday. The Euro rose from lows near US$1.3245 to US$1.3365, and was around US$1.3340 at the US close. The Aussie dollar fell from highs near US105.85c to US105.25c and was near US105.30c at the US close. And the Japanese yen held between 88.75 yen per US dollar and JPY89.43, ended at JPY88.17 in US trade and is at JPY89.26 this morning.

Locally in the week ahead, it’s a busy start in economics news, with inflation data, home loans for November and a survey of job ads for December all this morning. The numbers arrive ahead of official employment data for December on Thursday, which is expected to show the unemployment rate has risen to 5.4 per cent from 5.2 per cent.

Making news in the U.S., Federal Reserve Chairman will deliver a speech ahead of Tuesday’s U.S. retail sales for December and producer price index. On Wednesday we can expect the CPI for December, the industrial production and Fed beige book. Thursday rounds off the week with housing starts for December and jobless claims.

Japanese markets will be closed today for a public holiday.

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