CMC Markets Weekly Report
US stocks have rallied from intraday lows on Friday, picking up momentum after a slow start to eke out gains for the day.
US stocks have rallied from intraday lows on Friday, picking up momentum after a slow start to eke out gains for the day.
The Dow Jones Industrial Average rose 3.22 points to 15,558.83, after sinking as low as 15,405.16 earlier in the session. The broad-based S&P 500 finished 1.40 points, or 0.1 percent, higher at 1691.65, while the Nasdaq Composite Index put on 7.98, or 0.2 percent, to 3613.16.
In commodity markets, world oil prices slipped after China ordered industrial production capacity cuts in the face of slowing economic growth. The government action added to market concerns about weakening demand in China, the world's second-largest economy. New York's main contract, West Texas Intermediate (WTI) for September, finished the trading session on Friday at $US104.70 a barrel, down 79 US cents from Thursday's close. The European benchmark contract, Brent North Sea crude for delivery in September, fell 48 US cents to $US107.17 a barrel in London trade.
Gold futures edged lower as worries about any shifts in US monetary policy prompted some investors to reduce their gold holdings and lock in recent gains. Gold for August delivery, the most actively traded contract, on Friday fell $US7.30, or 0.6 per cent, to settle at $US1,321.50 a troy ounce on the Comex division of the New York Mercantile Exchange.
Copper fell for a second straight day, as concerns about growth in top consumer China weighed on the outlook for industrial metals demand, but a weak US dollar prevented further losses. Three-month copper on the London Metal Exchange (LME), untraded at the close, on Friday was last bid at $US6,870 a tonne from a last bid of $US7,010 on Thursday. Benchmark aluminium, untraded at the close, was bid at $US1,794 a tonne from a close of $US1,823 on Thursday. Nickel closed at $US13,850 from $US14,175 and Zinc at $US1,855 from Thursday's close of $US1,877.50.
The Aussie dollar is buying 92.54 US cents, in line with the Friday's local close. It is also buying 90.76 yen, 69.64 euro cents and 60.15 British pence.
The Australian market is expected to follow the US leads this week as local traders await direction and world markets keep a close eye on a US Federal Reserve policy meeting.
As well as a busy day of local data on Thursday, the main global economics event is a meeting of the US Federal Reserve's key interest rates setting committee. The Federal Open Market Committee, or FOMC, is expected to hold rates at 0-0.25 per cent, but investors will be looking for further clues about the central bank's stance on stimulus for the recovering economy.
Also released in the US this week, investors get data on GDP, consumer confidence, home prices and jobless claims.
In local news, whilst there is no major economic news scheduled for today, investors can expect ABS building approvals for June tomorrow followed by RBA private credit sector figures on Wednesday. Thursday its AIG performance on manufacturing index for July, RPData-Rismark house price index for July, and HIA new home sales for June.
Frequently Asked Questions about this Article…
US stocks rallied from intraday lows to finish with small gains on Friday. The Dow Jones Industrial Average rose to 15,558.83 after dipping as low as 15,405.16, the S&P 500 closed up 0.1 percent at 1,691.65, and the Nasdaq Composite finished about 0.2 percent higher at 3,613.16.
Oil prices eased after China ordered industrial production capacity cuts amid slowing growth, raising concerns about weaker fuel demand. New York WTI for September settled at US$104.70 a barrel (down US$0.79) and Brent for September traded at US$107.17 a barrel (down US$0.48).
Gold edged lower as some investors locked in recent gains amid uncertainty over US monetary policy, with August gold settling at US$1,321.50 an ounce (down US$7.30). Industrial metals fell on worries about China’s growth — three‑month LME copper was last bid at about US$6,870 a tonne (down from US$7,010), while aluminium, nickel and zinc also traded lower.
The Australian dollar was trading around 92.54 US cents. Other quoted rates were about 90.76 yen, 69.64 euro cents and 60.15 British pence, reflecting currency market moves as investors monitor global growth and central bank policy.
The FOMC meeting is the main global event this week and is expected to keep the federal funds rate at 0–0.25 percent. Markets will be watching Fed commentary closely for clues on future stimulus and the central bank’s outlook, which could influence equities, bonds, commodities and currencies.
Investors should watch scheduled US data on GDP, consumer confidence, home prices and weekly jobless claims. These reports can affect market sentiment and help indicate the strength of the economic recovery the Fed will be assessing.
Locally, investors can expect ABS building approvals for June, RBA private credit sector figures on Wednesday, and on Thursday AIG’s manufacturing performance index for July, the RP Data‑Rismark house price index for July, and HIA new home sales for June.
Yes. The Australian market is expected to follow US leads this week as local traders await direction from global markets and the FOMC. With major US policy and data releases on the calendar, world market moves are likely to influence local share prices and investor sentiment.
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