Friday’s session capped off the sixth consecutive rise for US stocks and while gains weren’t spectacular, we are talking new record highs. So for the week in total, the S&P 500 is up 1.4 per cent, which isn’t bad at all.
In terms of major themes there isn’t much -- the Fed appears to have calmed investor fears, suggesting that a rate hike isn’t on the cards just yet. Then economic data is having a good run, not that we saw much on Friday.
Overall, it’s smooth sailing. Although that, in itself, is worrying to some. It’s too smooth. Having sad that, there is little sign that we’ll get anything different this week -- barring geopolitical turmoil. There isn’t anything major in terms of the data that is likely to sway things one way or the other and it’s summertime up north, so things are quietening down. The most likely outcome is further modest gains for the week.
Equities were mixed on Friday’s session, Wall Street generally finding a modest bid, while European indexes were generally weaker. In Europe the Dax fell 0.2 per cent, the CaC fell 0.5 per cent, while the FTSE 100 was up 0.3 per cent. On Wall Street moves were better -- the S&P 500 finishing the session 0.2 per cent higher (1962), the Dow was 25 points higher (16947) and the Nasdaq rose 0.2 per cent (4368). By sector, energy, health and basic materials outperformed, while utilities, tech and consumer services underperformed.
Commodities generally pushed higher again with WTI crude up 0.8 per cent ($107.3), although Brent fell 0.2 per cent ($114.8). In the metals space, copper and silver found a strong bid, rising 1.4 per cent and 1.5 per cent respectively, although gold was up smalls to $1316.
Forex markets didn’t seem to see too much action either. The euro is off maybe 20 pips to $US1.3590 on a 75 pips range. The British pound traded on a 60 pips range and is about 35 pips lower from Friday at 4.30pm (AEST). As for the Australian dollar, it had a very quiet session trading maybe 30 pips lower to sit at $US0.9375 as I write. The Japanese yen is at 102.114.
Rates eased on Friday night with the US 10-year Treasury yield down 3bp to 2.607 per cent (5bp range). The 5-year Treasury note fell about 2bp in yield to 1.678 per cent, while the 2-year is 1bp lower at 0.452 per cent. Australian futures then pushed higher, up 2 ticks on the 3s (97.240) and 1 tick on the 10s (96.320).
Elsewhere, there wasn’t much key data. The only major stuff out came from Europe and even here it wasn’t market moving. So for instance, German producer prices fell 0.2 per cent in May following a 0.1 per cent fall the month prior, to be 0.8 per cent lower annually. Then the eurozone current account surplus came in at €21.5 billion in April euro from €18.8bn. Finally, eurozone consumer confidence slipped a bit in June, to -7.4 from -7.1.
Markets today. The SPI suggests our market will post a modest rise of 0.2 per cent today. Data-wise it’s very quiet for Australia this week. Nothing today and only a couple of minor labour force indicators out for the rest of the week -- skilled vacancies on Wednesday and job vacancies on Thursday. The key global data includes HSBC’s China manufacturing PMI at 11.45am (AEST) today with a few other equally minor Chinese indicators trickling out for the week -- the Conference Board’s China indicator on Wednesday being one of them.
Outside of that, US data is mainly focussed on housing this week, kicking off with existing home sales on Monday night, and then house prices and new home sales on Tuesday night. Later in the week we see durable goods orders and another estimate of Q1 GDP. Also worth watching -- a couple of speeches from Fed speakers -- the Philly Fed President Charles Plosser, The Richmond Fed President Lacker and St Louis Fed President Bullard.
In Europe there are a few pieces of note -- the PMI’s tonight, the German IFO survey Tuesday night and the business climate indicator on Friday.
Have a great day.