CMC Markets Weekly Report
Stocks in the U.S reversed a two-day slump to close out the week on a positive note. The Dow Jones Industrial Average eked out a gain of 10.37 points to close at 14,547.51, after falling nearly 100 points at the open, boosted by Microsoft. IBM and GE led the laggards. IBM's sharp decline single-handedly put more than 100 points of downward pressure on the blue-chip index.
Stocks in the U.S reversed a two-day slump to close out the week on a positive note. The Dow Jones Industrial Average eked out a gain of 10.37 points to close at 14,547.51, after falling nearly 100 points at the open, boosted by Microsoft. IBM and GE led the laggards. IBM's sharp decline single-handedly put more than 100 points of downward pressure on the blue-chip index.
The S&P500 gained 13.64 points to end at 1,555.25 whilst the Nasdaq bounced 39.70 points to finish at 3,206.06.
With no major economic news on Friday, the focus remained largely on corporate earnings. To date, 104 S&P 500 companies have reported results this quarter with 67 percent of firm topping earnings expectations. Meanwhile, only 43 percent have exceeded revenue estimates.
Next week, about 170 of the S&P 500 companies and 10 Dow stocks are on schedule to report earnings. Notable companies include Caterpillar, Apple, Qualcomm and ExxonMobil.
In commodity markets, oil prices gained Friday on speculation that OPEC plans to cut output, recovering somewhat from sharp losses earlier in the week over worries about weakening Chinese economic growth.
In New York, the main contract, WTI crude for delivery in May, added 28 cents from Thursday to end at $US88.01 a barrel. In London, Brent North Sea crude for delivery in June gained 52 cents to $US99.65 a barrel.
Gold prices inched higher, briefly trading above $US1400 an ounce, as reports of swift sales of the physical metal by bullion traders and coin stores bolstered investor interest in the precious metal. Gold for April delivery, the front-month contract, on Friday rose $US3.30, or 0.2 percent, to settle at $US1,395.30 a troy ounce on the Comex division of the New York Mercantile Exchange.
Copper closed lower on the London Metal Exchange (LME), notching up its biggest weekly loss for 16 months as investors continued to look for better value in other assets. At the close on Friday, LME three-month copper was down 1.4 per cent at $US6988 a metric ton.
The Australian dollar is lower, hitting a six-week low of $US1.0259 before recovering slightly as its U.S. counterpart rallies amid concern about the weak global economic growth.
On the economic front, tonight sees the Chicago national activity index and existing home sales, Tuesday brings new home sales, the FHFA house price index and the Richmond Fed manufacturing index, Wednesday durable goods orders, and Friday the Michigan Uni consumer sentiment measure along with the first estimate of March quarter GDP. Expectations are for 1.4 percent growth compared to December�s 1.0 percent.
Tuesday will also see a flash estimate of the U.S. April manufacturing PMI. The eurozone will also see an estimate, and both will follow HSBC�s flash reading for the Chinese PMI. The UK will also post a first estimate of March quarter GDP on Thursday, for which 0.1 percent growth is expected after December�s shock 0.3 percent contraction. The influential German IFO business sentiment survey is due on Wednesday.
The Bank of Japan will hold a monetary policy meeting on Friday, but after having made The Big Announcement last month, will probably not add to it.
Locally, Reserve Bank of Australia deputy head, payments policy department, Mark Manning is due to appear before the Parliamentary Joint Committee on Corporations and Financial Services� inquiry into the Corporations and Financial Sector Legislation amendment Bill and on Wednesday, the March quarter CPI data is released. Economists are expecting a 0.6 percent jump following the December quarter�s 0.2 percent. This would take annual headline inflation to 2.7 percent, up from 2.2 percent, but still well inside the RBA�s 2-3 percent target band.
In equities news, Australand has its annual general meeting.
Frequently Asked Questions about this Article…
U.S. stocks rebounded to finish the week higher: the Dow closed up 10.37 points at 14,547.51, the S&P 500 rose 13.64 points to 1,555.25 and the Nasdaq gained 39.70 points to 3,206.06. Microsoft helped lift the market, while IBM and GE were notable laggards — IBM’s sharp drop alone put more than 100 points of downward pressure on the Dow.
So far 104 S&P 500 companies have reported this quarter; about 67% have beaten earnings expectations, but only 43% have topped revenue forecasts. Looking ahead, roughly 170 S&P 500 firms and 10 Dow stocks are scheduled to report next week, including high-profile names such as Caterpillar, Apple, Qualcomm and ExxonMobil.
Oil gained on speculation that OPEC may cut output, recovering from earlier losses tied to worries about slowing Chinese growth. WTI for May delivery settled at about US$88.01 a barrel, while Brent for June delivery was near US$99.65 a barrel.
Precious and base metals are showing mixed signals: gold briefly traded above US$1,400 an ounce and settled at US$1,395.30 for April delivery, supported by spot buying from bullion traders and coin stores. Copper on the LME fell 1.4% to about US$6,988 a metric ton, marking its biggest weekly loss in 16 months as investors hunt for value elsewhere.
The Australian dollar slid to a six-week low of US$1.0259 before recovering slightly. The weakness largely reflects a rally in the U.S. dollar amid concerns about softer global economic growth, which is weighing on risk-sensitive currencies like the AUD.
Key data to watch includes the Chicago national activity index and existing home sales, new home sales, the FHFA house price index, the Richmond Fed manufacturing index, durable goods orders, the Michigan consumer sentiment reading and the first estimate of March-quarter GDP (expectations around 1.4% growth). Tuesday brings flash April manufacturing PMIs for the U.S. and eurozone (and HSBC’s Chinese PMI), the German IFO survey is due Wednesday, the UK posts a first estimate of March-quarter GDP on Thursday, and the Bank of Japan holds a policy meeting on Friday — though another major move is not expected after its recent announcement.
Locally, RBA deputy head of payments policy Mark Manning is scheduled to appear before a parliamentary committee considering the Corporations and Financial Sector Legislation amendment Bill. Also watch the March-quarter CPI on Wednesday — economists expect a 0.6% quarterly rise, which would lift annual headline inflation to about 2.7%, still inside the RBA’s 2–3% target band.
Yes — Australand is holding its annual general meeting, and a number of large companies (including Caterpillar, Apple, Qualcomm and ExxonMobil) are among the notable firms scheduled to report earnings next week.
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