CMC Markets Weekly Report
Stocks in the U.S. finished modestly higher in light-volume trading on Friday, with the Nasdaq closing at its best level since November 2000, but gains were limited as investors hesitated to jump in amid a lack of strong catalysts to further fuel the recent rally.
Stocks in the U.S. finished modestly higher in light-volume trading on Friday, with the Nasdaq closing at its best level since November 2000, but gains were limited as investors hesitated to jump in amid a lack of strong catalysts to further fuel the recent rally.
The Dow Jones Industrial Average gained 48.92 points, or 0.35 percent, to end at 13,992.97, whilst the S&P500 climbed 8.54 points, or 0.57 percent, to close at 1,517.93. The Nasdaq rallied 28.74 points, or 0.91 percent, to finish at 3,193.87.
So far, almost 60 percent of S&P 500 companies have posted quarterly results, with 70 percent of firms topping earnings expectations and 66 percent exceeding revenue estimates, according to Thomson Reuters. If all remaining companies report earnings in line with estimates, earnings will be up 5.2 percent from the fourth quarter of last year.
On the economic front, the U.S. trade deficit narrowed to its narrowest in three years, according to the Commerce Department, suggesting the U.S. government could upwardly revise its advance reading for fourth-quarter GDP, which showed the economy contracted at a 0.1 percent annual rate.
But wholesale inventories slipped in December to a seasonally adjusted $497.65 billion, according to the Commerce Department, the first decline since June.
China said its exports grew 25 percent in January from a year ago, the strongest showing since April 2011 and well ahead of market expectations for a 17 percent rise, while imports also beat forecasts, surging 28.8 percent on the year.
Meanwhile, German data showed a 2012 surplus that was the nation's second highest in more than 60 years.
The US dollar was mixed against major currencies in European and U.S. trade on Friday. The Euro fell from highs near US$1.3430 to US$1.3350 and was near US$1.3365 at the U.S. close. The Australian dollar is slightly higher finishing near US103.15c at the close of U.S. trade.
World crude oil prices were again mixed on Friday. Brent oil rose to 9-month highs in response to solid Chinese growth in oil imports but US Nymex eased. Brent crude rose by US$1.66 to US$118.90 but the US Nymex crude fell by US11c to US$95.72 a barrel.
Base metal prices rose up to 2.0 percent on the London Metals Exchange on Friday. Zinc was the best performer over the week rising 1.22 percent whilst other metals eased up to 1.7 percent led by nickel. Gold price however, eased on Friday. The Comex April gold futures price was down by US$4.40 an ounce or 0.3pct to US$1,666.90 per ounce.
In the week ahead, investors in Australia will be looking to earning results from banking, mining and retail giants for direction.
Today we can expect ABS home loans and investment lending figures and first half results from Hills Holdings and JB Hi-Fi.
Tuesday, HIA trade report for December quarter, NAB monthly business survey for January and results from Bradken and Slater and Gordon.
Wednesday, ABS lending finance for December, consumer sentiment along with results from Commonwealth Bank, Stockland, Goodman Group, Boral, Leighton, Ansell, CSL, Computerhsare and Oz Mineral to name a few.
Thursday, RIO is due to report along with David Jones, Q2 sales, ASX Ltd, Graincorp, Mirvac and Whitehaven.
Friday rounds off the week with results from Pacific Brands, Sims Metal Management and Charter Hall.
Frequently Asked Questions about this Article…
U.S. stocks finished modestly higher in light-volume trading. The Dow rose 48.92 points to 13,992.97, the S&P 500 climbed 8.54 points to 1,517.93 and the Nasdaq rallied 28.74 points to 3,193.87 — its best close since November 2000. However, gains were capped because investors hesitated to buy aggressively amid a lack of strong catalysts to extend the rally.
Almost 60% of S&P 500 companies had reported at the time of the article, with about 70% beating earnings expectations and 66% topping revenue forecasts. If the remaining companies report in line with estimates, aggregate earnings would be up roughly 5.2% from the prior quarter — a positive sign for investors tracking corporate earnings momentum.
The Commerce Department reported the U.S. trade deficit narrowed to its smallest level in three years, which could lead to an upward revision to the advance GDP reading that had shown a 0.1% annual contraction in Q4. At the same time, wholesale inventories fell in December to a seasonally adjusted $497.65 billion — the first monthly decline since June — a mixed signal for growth.
China surprised on the upside with January exports up 25% year-on-year and imports up 28.8%, the strongest export growth since April 2011 — a bullish signal for commodity demand. Germany reported a 2012 current account surplus that was its second-highest in more than 60 years, underscoring continued strength in Europe’s largest economy.
The U.S. dollar was mixed. The euro eased from near US$1.3430 to about US$1.3350 (around US$1.3365 at the U.S. close). The Australian dollar finished slightly higher, near US103.15 cents (about US$1.0315) at the close of U.S. trade — useful context for investors with exposure to FX or offshore assets.
Commodities were mixed: Brent crude rallied to nine-month highs at US$118.90 a barrel (up US$1.66), while U.S. Nymex crude slipped to US$95.72 (down US$0.11). Base metals rose up to 2% on the LME, with zinc up about 1.22% for the week, while gold eased to US$1,666.90 an ounce (down US$4.40). Strong Chinese import data helped lift oil and industrial metals, which matters for commodity-sensitive stocks and portfolios.
The article flags a busy week of Australian results and data: expect ABS home loans and investment lending figures, first-half results from Hills Holdings and JB Hi‑Fi, HIA trade data, NAB monthly business survey, and corporate results from firms including Bradken, Slater & Gordon, Commonwealth Bank, Stockland, Goodman Group, Boral, Leighton, Ansell, CSL, Computershare, Oz Minerals, Rio Tinto, David Jones (Q2 sales), ASX Ltd, GrainCorp, Mirvac, Whitehaven, Pacific Brands, Sims Metal Management and Charter Hall.
The article suggests a cautious stance: markets had modest gains but liquidity was light and there were no strong catalysts to drive the rally. Everyday investors may prefer to watch upcoming earnings and key economic releases before making significant moves, focusing on diversified, long-term plans rather than reacting to short-term noise.
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