CMC Markets Weekly Report

The Dow and S&P 500 turned decisively higher in the final minutes of trading to close at their best level since December 2007.

The Dow and S&P 500 turned decisively higher in the final minutes of trading to close at their best level since December 2007.

Stocks wavered around the flat-line for most of the session following a weaker-than-expected consumer sentiment report and a mixed batch of corporate earnings.

The Dow Jones Industrial Average gained 53.68 points, or 0.39 percent to close at 13,649.30, led by GE. The S&P500 climbed 5.04 points, or 0.34 percent, to end at 1,485.98 whilst the Nasdaq slipped 3.91 points, or 0.14 percent, to finish at 3,134.71.

On the economic front, consumer sentiment dipped to 71.3 in January, according to the Thomson Reuters/University of Michigan survey, falling to its lowest level since December 2011. Economists polled by Reuters expected a reading of 75.

Among earnings, Dow component General Electric rallied after the conglomerate posted results that beat estimates, thanks to growth in China and in resource-rich nations.

The House GOP will take up a plan next week that would extend the debt limit to April 15, requiring both the House and Senate to pass budget resolutions by then.

Economic data from China showed the economy grew at a faster than expected 7.9 percent in the fourth quarter, rebounding after seven straight quarters of slowdown, indicating the world's second-largest economy was recovering from its recent slowdown. Both Tokyo and Hong Kong stock markets surged to multi month highs following the upbeat sentiment.

The US dollar rose against major currencies in European and US trade on Friday. The Euro eased from near US$1.3400 to US$1.3280 and was near US$1.3315 at the close of US trade. The Aussie dollar fell from highs near US105.30c to US104.85c and was near US105.05c at the US close. The Japanese yen eased from 89.69 yen per US dollar to JPY90.10, and was trading at JPY90.05 at the close of the US session.

Oil prices rose on Friday as investors banked on greater demand following encouraging economic data in China and the United States. New York’s main contract, West Texas Intermediate for February, settled at $US95.56 a barrel, up 7 US cents from Thursday’s close and Brent North Sea crude for delivery in March rose 79 US cents, closing at $US111.89 a barrel.

Base metals closed mostly higher on the London Metal Exchange (LME), propped up by hopes for improved Chinese metals demand following stronger-than-expected economic data from the region. At the PM kerb close on Friday, LME three-month copper was up 0.1 per cent at $US8,061/ton.

The Comex gold futures price fell by US$3.80 an ounce to US$1,687.00 per ounce. Over the week gold rose by US$26.40 or 1.6 percent. And the spot iron ore price fell by 30c on Friday to US$145.10 a tonne and lost US$9.80 over the week.

Making news this week:

  • Tuesday: GUD Holdings first half results, Australian Pharmaceutical AGM, Centro Retail extraordinary meeting
  • Wednesday: Westpac leading index for November, Commonwealth Bank business sales indicator for December, official CPI data for the fourth quarter of 2012, BHP December quarter production report
  • Thursday: HIA-RP Data residential land report for September quarter 2012, Fortescue second quarter production report, OZ Minerals December quarter report
  • Friday: ResMed first half results, Coal of Africa AGM

Making news offshore this week:

  • Monday: Martin Luther King public holiday in the US
  • Tuesday: US existing home sales for December 2012, Bank of Japan meeting
  • Thursday: China HSBC flash manufacturing PMI for January, US jobless claims for week of 12 January
  • Friday: US new home sales for December

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