CMC Markets Weekly Report

Wall Street ended another week on a high note. The positive finish ensured the third week of record closes for the S&P 500. The S&P closed up 0.4% to 1633 as the Dow rose 35 points, or 0.2% and the Nasdaq added 0.8%.

By CMC Markets · 13 May 2013

By CMC Markets ·
13 May 2013

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The Aussie traded below parity for the first time in almost a year. Early Saturday morning it had recovered slightly to sit at US$1.009. Sudden strength in the greenback may well prove beneficial for the Australian economy, but it offers little joy to gold bulls. Gold fell another US$13.70 to US$1443.20/oz on Friday night as the currency/bonds trade played out.

A strong dollar put base metals under pressure, although bellwether copper is still finding technical support after its big plunge a week earlier. Copper rose 0.5% on Friday and the other metals posted mixed results. West Texas losing US50c to US$95.89/bbl.Spot iron ore fell US60c to US$129.60/t.

In the U.S Tonight we see U.S retail sales and business inventories, while Wednesday brings industrial production, housing market sentiment, the PPI and the Empire State manufacturing index. Thursday it�s the CPI, housing starts and the Philadelphia Fed manufacturing index, and Friday sees the Conference Board�s leading index and the Michigan Uni fortnightly consumer sentiment survey.

The eurozone also has some important numbers out this week, including industrial production and the ZEW investor sentiment survey on Tuesday, a revision of first quarter GDP on Wednesday and the trade balance on Thursday. Japan will revise its first quarter GDP on Thursday.

China will release industrial production, retail sales and fixed asset investment numbers today.

Australia�s economic week features housing finance, investment lending and the NAB business confidence survey today, and vehicle sales and the March quarter wage cost index on Wednesday. The out of cycle earnings reports will continue to flow from Australian corporates this week. Today sees an interim result from Incitec Pivot (IPL) and DuluxGroup (DLX) and Stockland (SGP) will hold an investor day. CSR (CSR), SingTel (SGT) and SP Ausnet (SPN) all provide full-year reports on Wednesday, along with a quarterly update from Paladin Energy (PDN). Graincorp (GNC) reports its interim on Thursday.

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Frequently Asked Questions about this Article…

What happened on Wall Street last week and how did major US indexes perform?

Wall Street closed the week on a high note, marking the S&P 500's third consecutive week of record closes. The S&P finished up 0.4% to 1633, the Dow rose about 35 points (0.2%), and the Nasdaq gained 0.8%.

Why did the Australian dollar trading below parity matter and where was it trading?

The Aussie dipped below parity with the US dollar for the first time in nearly a year, then recovered slightly to about US$1.009 early Saturday. A stronger US dollar can benefit some parts of the Australian economy but tends to pressure commodity prices and commodity-linked assets.

How did gold and base metals react to the stronger US dollar?

Gold fell further as the dollar strengthened, losing US$13.70 to close at US$1,443.20/oz in the latest session. Base metals were under pressure from the strong dollar, although copper showed some resilience and rose 0.5% after an earlier sharp decline.

What were the recent oil and iron ore price moves investors should note?

West Texas Intermediate (WTI) crude lost about US$0.50 to trade near US$95.89 per barrel, and spot iron ore eased by US$0.60 to US$129.60 per tonne, reflecting mixed commodity trends amid currency moves.

Which US economic data releases should investors watch this week?

Key US releases this week include retail sales and business inventories, followed midweek by industrial production, housing market sentiment, the PPI and the Empire State manufacturing index. Later in the week watch the CPI, housing starts, the Philadelphia Fed index, and Friday's Conference Board leading index plus the Michigan consumer sentiment survey.

What international economic updates are scheduled this week that could affect markets?

Important international data include eurozone industrial production, the ZEW investor sentiment survey, a revision of first-quarter eurozone GDP and the trade balance; Japan's revised first-quarter GDP; and China’s industrial production, retail sales and fixed asset investment figures.

Which Australian economic indicators and company reports are on the calendar this week?

Australia's calendar features housing finance, investment lending, the NAB business confidence survey, vehicle sales and the March-quarter wage cost index. Corporate updates include interim results from Incitec Pivot (IPL) and DuluxGroup (DLX), a Stockland (SGP) investor day, full-year reports from CSR, SingTel (SGT) and SP Ausnet (SPN), a quarterly update from Paladin Energy (PDN), and GrainCorp’s (GNC) interim on Thursday.

How can everyday investors use this week’s market moves and data releases to inform decisions?

Use the flow of macro data and corporate reports to gauge momentum in equities and commodities: watch the US CPI and other US indicators for global risk sentiment, monitor currency moves like the stronger US dollar for pressure on commodities (gold, base metals, iron ore), and track Australian corporate results and domestic indicators for local market direction. Staying aware of these announcements can help with timing, risk management and portfolio rebalancing.