In US economic data, the final reading on US June quarter GDP was revised up from 4.2 per cent to 4.6 per cent. The result was in line with expectations. The major contributors were a lift in business investment and stronger exports (up 11.1 per cent in June quarter and the biggest gain since 2010). Inflation as measured by the PCE index was unchanged at a 2.3 per cent annual rate. The final University of Michigan Consumer Confidence reading for September held steady at 84.6 and was well ahead of the August result of 82.5.
European shares were mostly higher on Friday, led by the banking sector. The STOXX Europe banking index rose 1 per cent on bets that it would benefit the most from the ECB's ongoing stimulus. The FTSEurofirst 300 index rose by 0.3 per cent. The German Dax fell 0.2 per cent while the UK FTSE gained 0.2 per cent. And Australia's major miners were weaker in London trade with shares in BHP Billiton down by 0.8 per cent while Rio Tinto fell 0.5 per cent.
US sharemarkets rebounded on Friday as upbeat economic data and the prior session's sharp losses spurred a round of bargain hunting. Apple rallied 2.9 per cent after the almost 4 per cent drop on Thursday. Nike shares jumped 12 per cent after posting better-than-expected first quarter earnings, helped by a lower tax rate and stronger consumer spending on footwear and apparels. The Dow Jones index rose by 167 points, or 1 per cent. The broader S&P 500 index gained 0.9 per cent while the Nasdaq rose 45 points, or 1 per cent. For the week the Dow Jones lost 1 per cent, while the S&P 500 gave back 1.4 per cent and the Nasdaq was the worst performer down 1.5 per cent.
US treasury prices fell on Friday (yields higher). The departure of Bill Goss from Pimco triggered a bout of selling on speculation that the world’s largest bond fund may shift away from US government debt. US 2-year yields rose by 1 point to 0.591 per cent while US 10-year yields rose by 3 points to 2.532 per cent.
Major currencies were weaker against the greenback over the European and US sessions on Friday. The US dollar lifted for the 11th consecutive week. The euro fell from highs near $US1.2755 to a 22-month low near $US1.2675, ending US trade near the $US1.2685. The Australian dollar fell from highs near US88.00c to lows around US87.50c before ending the US session near US88.65c. And the Japanese yen weakened from 108.85 yen per US dollar to ¥109.45, ending US trade near ¥19.25.
World oil prices lifted on Friday following the upbeat US growth data. Although ample world oil supplies continued to taper gains. Brent crude was unchanged at $US97 a barrel while the US Nymex crude price rose by $US1.01 a barrel or 1.1 per cent to $US93.54 a barrel. For the week Brent lost 1.4 per cent while Nymex crude gained 1.2 per cent.
Base metal prices were mixed on Friday. Nickel led the declines (down 2 per cent) while copper lifted 0.4 per cent. Gold prices fell on Friday with the Comex gold futures quote lower by $US6.50 an ounce or 0.6 per cent to $US1,215.40 per ounce. Comex gold fell for the fourth consecutive week down 0.1 per cent. Iron ore was unchanged on Friday at $US78.60 a tonne.
Ahead: In Australia, no economic data is released. In the US, in the pending home sales and personal income and spending are released.
Savanth Sebastian is economist at Commsec.