CMC Markets Weekly Report
The S&P 500 index and the Dow Jones Industrial Average are 3.1 percent and 3.3 percent below their respective all-time highs set in the earlier in the month to close at 1,656 and 15,081. Whilst the tech-heavy NASDAQ finished the week down 3.34 points to 3,603 points.
The S&P 500 index and the Dow Jones Industrial Average are 3.1 percent and 3.3 percent below their respective all-time highs set in the earlier in the month to close at 1,656 and 15,081. Whilst the tech-heavy NASDAQ finished the week down 3.34 points to 3,603 points.
In US economic data, consumer sentiment weakened from 85.1 in July to a provisional reading of 80.1 In August. But US housing starts lift by 5.9 percent in July to a 896,000 annual rate, close to forecasts. And US productivity grew at a 0.9 percent annual rate in the June quarter with unit labour costs up 1.4 percent.
US stocks face continued challenges and a further push off recent highs as more retailers report earnings this week and Federal Open Market Committee meeting minutes are released.
In commodity markets, Oil prices edged higher driven by worries over more unrest in Egypt, which sits astride the key Suez Canal and Sumed pipeline conduits for oil flowing from the Gulf. In New York the benchmark WTI crude for September delivery added 0.13 cents to end at $US107.46 ($A118.22) a barrel on Friday. In London, Brent North Sea crude for delivery in October finished at $US110.40 a barrel, up 0.94 cents.
Gold for December delivery rose $US10.10, or 0.7 per cent, to settle at $US1,371 a troy ounce on the Comex division of the New York Mercantile Exchange, an eight-week high.
Copper prices have closed at their highest level in 10 weeks on the London Metal Exchange (LME), with investors encouraged by a run of strong macro-economic data.
At the PM kerb close on Friday, the LME's flagship three-month contract was up 1.2 per cent at $US7,399 a metric ton, its highest close since June 5.
Aluminium was up 1.9 per cent at $US1,945 a ton.
The Australian dollar is higher after weak economic reports cast doubt over the recovery of the US economy, putting downward pressure on the greenback. At 0700 AEST on Monday, the local unit was trading at 91.87 US cents, up from 91.57 cents on Friday.
In economic news on Monday, the Australian Bureau of Statistics (ABS) is due to release new motor vehicle sales for July. The US has no major economic data released.
In equities news, BlueScope Steel (BSL), Amcor (AMC), Aurizon (AZJ), The Reject Shop (TRS), Federation Centres (FDC), Challenger Financial (CFG), Dexus Property Group (DXS), and Bendigo and Adelaide Bank (BEN) are all expected to post full year results.
Frequently Asked Questions about this Article…
The S&P 500 and the Dow Jones Industrial Average finished about 3.1% and 3.3% respectively below their all-time highs set earlier in the month, closing at 1,656 and 15,081. The NASDAQ ended the week slightly lower at 3,603 (down 3.34 points). For everyday investors, this is a modest pullback from recent highs that can increase short-term volatility but doesn’t necessarily signal a long-term market change — it’s a reminder to focus on diversified holdings and your investment timeframe.
Recent US data showed consumer sentiment weakening from 85.1 in July to a provisional 80.1 in August, while housing starts rose 5.9% in July to a 896,000 annual rate. Productivity grew at a 0.9% annual rate in the June quarter and unit labour costs increased 1.4%. These mixed signals — weaker sentiment but stronger housing and productivity — can create market uncertainty; investors often watch such data for clues about growth, inflation and potential central bank actions.
US stocks could see further downside as more retailers report earnings and the Federal Open Market Committee (FOMC) meeting minutes are released. Retail earnings can affect sentiment across consumer-linked sectors, while the FOMC minutes may reveal policymakers’ views on interest rates and inflation. Investors should watch retailer results and the FOMC minutes for guidance on consumer health and monetary policy direction.
Oil prices edged higher on concerns about unrest in Egypt, which sits near the Suez Canal and Sumed pipeline — key conduits for Gulf oil. In New York, WTI crude for September delivery settled at about US$107.46 a barrel (A$118.22), while Brent North Sea crude for October closed near US$110.40 a barrel. Geopolitical risks like these can push energy prices up, affecting petrol prices and inflation-sensitive sectors.
Gold for December delivery rose about US$10.10 to settle at US$1,371 an ounce — an eight-week high — reflecting some safe-haven demand. On the London Metal Exchange, copper hit a 10-week high with the three-month contract up 1.2% at US$7,399 a tonne, and aluminium rose 1.9% to US$1,945 a tonne. Strong macro data is supporting metals, while gold’s rise suggests some risk-off positioning; investors in commodities or resources stocks should monitor these trends for potential impacts on portfolios.
The Australian dollar rose after weaker US economic reports cast doubt over the US recovery, which put downward pressure on the US dollar. As of 07:00 AEST on Monday, the AUD was trading at about 91.87 US cents, up from 91.57 US cents on Friday. A stronger AUD can affect Australian exporters, importers and investors holding foreign assets, so local investors should consider currency exposure in their portfolios.
The Australian Bureau of Statistics (ABS) is due to release motor vehicle sales for July on Monday. Motor vehicle sales are a useful short-term indicator of consumer demand and domestic economic activity, so the figure may influence market sentiment for consumer-facing and cyclical stocks.
The companies expected to post full-year results include BlueScope Steel (BSL), Amcor (AMC), Aurizon (AZJ), The Reject Shop (TRS), Federation Centres (FDC), Challenger Financial (CFG), Dexus Property Group (DXS) and Bendigo and Adelaide Bank (BEN). Shareholders should watch reported earnings, management commentary and any forward guidance — these details can affect share prices and provide insight into sector trends across resources, industrials, property and financials.
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