CMC Markets Weekly Report

Stocks in the U.S. closed out the week with strong gains, with the Dow and S&P 500 hitting fresh highs following several positive economic reports.

Stocks in the U.S. closed out the week with strong gains, with the Dow and S&P 500 hitting fresh highs following several positive economic reports.

The Dow Jones Industrial Average rallied 121.18 points, or 0.80 percent, to close at 15,354.40, the S&P500 jumped 17 points, or 1.03 percent, to end at 1,667.47 whilst the Nasdaq advanced 33.73 points, or 0.97 percent, to finish at 3,498.97.

On the economic front, consumer sentiment gained in May to the highest level since July 2007, according to the Thomson Reuters/University of Michigan index. Leading indicators rose in April, hitting its highest level in nearly five years, according to the Conference Board, suggesting an anticipated growth slowdown would be temporary.

In commodity markets, world oil prices rose for the third day in a row after a better-than-expected reading on U.S. consumer confidence boosted hopes for stronger energy demand in the top global economy. West Texas Intermediate for June delivery, rose 86 U.S. cents from Thursday to close at $US96.02 a barrel on Friday. Brent North Sea crude for delivery in July also rose 86 U.S. cents, settling at $US104.64 a barrel in London.

Gold fell for the seventh straight trading day, notching its longest losing streak since the financial crisis as the metal approached a fresh low. Fuelling the latest leg of gold's selloff which has sent prices down 7.4 percent, or more than $US100 were U.S. indicators that pointed to an improving economy.

Gold for May delivery, the front-month futures contract, on Friday slid $US22.20, or 1.6 percent, to $US1,364.90 a troy ounce on the Comex division of the New York Mercantile Exchange. The most actively traded gold contract, for June delivery, ended at $US1,364.70, also declining by $US22.20.

Copper on the London Metal Exchange (LME) closed higher, although earlier gains stalled in the European afternoon in a quiet trading session as the U.S. dollar strength resumed. Meanwhile, the potential ability of warehouse exit queues to affect prices came back into focus with global stockpile shifts showing volatility this month. By the close of open-outcry trading on Friday, copper was 0.3 per cent higher on the previous day's settlement at $US7,300 a metric ton, having drifted a touch from its intraday high as the US dollar resumed a stronger pattern against the euro.

The Aussie dollar was buying 97.43 U.S. cents, roughly in line with where it closed in offshore trade early on Saturday. The Aussie hit 97.12, the lowest since early June last year. It was also buying 100.93 yen, 75.92 euro cents and 64.19 British pence.

In the week ahead, today Commonwealth Bank business sales indicator for April is released. Wednesday, we can expect minutes from the RBA's May interest rate meeting, Westpac consumer confidence for May and Thursday Melbourne Institute consumer inflation expectation.

In the US the national economic activity index is released tonight, mortgage applications, existing home sales, FOMC minutes on Wednesday, PMI manufacturing index flash, FHFA home price index on Thursday and durable goods orders on Friday.

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