The Aussie market struggled last week, however stocks did come off their earlier lows amid hopes for further stimulus in the US.

The offshore concerns added to worries over the health of the domestic economy, with last week’s disappointing jobs report overshadowing better-than-expected 2Q GDP data.

The ASX 200 shed 48 points (-1.1%) for the week, closing at 4195.

The mining giants struggled amid deteriorating prospects for the global economy.  BHP Billiton (ASX:BHP) lost 2.9% and Rio Tinto (ASX:RIO) fell 1.1%.

Gold miners were among the leading gainers on the back of continued strength in bullion prices.  Newcrest Mining (ASX:NCM) added 1.9% whilst OceanaGold (ASX:OGC) soared 10%.

Among the big four, National Australia Bank (ASX:NAB) slipped 0.8% amid reports it’s interested in acquiring over 600 Lloyds branches in the UK.

Macquarie Group (ASX:MQG) disappointed the market with another profit downgrade.  MQG shares sank 8.6% for the week.

Economics

A host of key data last week offered a mixed assessment of the domestic economy.

On the employment front, the latest ANZ Job Ads Survey showed the number of job advertisements falling 0.6% in August – the second straight monthly decline.

On-year, job ads were up 6.1%, which was the slowest yearly growth since February 2010.  Newspaper ads slumped 7.3% on-month whilst internet ads fell a more modest 0.5%.

The deteriorating jobs market was confirmed later in the week when the unemployment rate unexpectedly rose to 5.3% in August (from 5.1% in July).  Economists were expecting the rate to remain unchanged.

The economy shed 9,700 jobs in August, well below estimates of a 10,700 gain.  Full-time employment fell by 12,600, partially offset by a 2,900 increase in part-time jobs.

Both pieces of data provided further evidence of employers becoming more cautious amid the recent global market turbulence.

The market volatility was also cited by the RBA when it decided to leave the official cash rate on hold (4.75%) at last Tuesday’s meeting.

The central bank said the near-term outlook had weakened compared to a few months ago but the long-term growth was likely to be at trend or higher.

It stuck with its previous stance on inflation, highlighting concerns about the medium-term outlook for CPI even though it has remained within the RBA’s 2% – 3% target band.

On the recent US and European volatility, the RBA said there was little evidence available to gauge the impact on other regions of the world economy.

However there was some good news with Australia’s economy growing 1.2% in the June quarter.  The GDP increase was higher than economist estimates of a 1% rise.

Inventory rebuilding was the main driver of the result, with growth coming mainly from the mining states, Queensland and WA.

Household consumption was also stronger in the quarter, likely reflecting the lack of interest rate hikes since November.

However net exports subtracted 0.5% from the result, with coal shipments yet to fully recover from the December flooding.

In other economic news, the number of home loans approved grew 1% in July, missing expectations of a 1.6% gain.

Also, Australia’s current account deficit narrowed to $7.4 billion in the June quarter, from an upwardly revised $11.1 billion in the previous quarter.

Overseas wrap

International markets had a poor finish to the week as euro-zone debt fears and the health of the US economy returned to the forefront of investor concerns.

Crucial speeches by Barack Obama and Ben Bernanke were the catalyst for the early week gains, with investors hopeful the two would introduce new stimulus measures to support the economy.

However the mood soured towards the week’s end amid reports German banks were being instructed to prepare for a possible Greek debt default.

For the week, the Dow lost 2.2%, the S&P500 fell 1.7% and the Nasdaq dropped 0.5%.

The losses were more intense in Europe, with the German DAX sinking 6.3%, the French CAC slumping 5.5% and the UK FTSE down 1.5%.

Asian markets were also weaker on the back of global macroeconomic concerns.  The Nikkei declined 2.5%, whilst the Hang Seng (-1.7%) and Shanghai Composite (-1.1%) also contended with data showing inflationary pressures in China.

Among the commodities, gold slipped 0.9% whilst oil rose 0.9%.  Base metals were generally weaker, with aluminium and copper giving up 2.8% each.

   Written by: marketpulse   Other posts from: marketpulse

The possibility of further stimulus by the US Fed drove the Aussie market higher last week, however a Friday sell-off dampened the positive sentiment ahead of the latest US jobs data.

The ASX 200 climbed 43 points (+1%) for the week, closing at 4243.

Mining stocks were among the week’s leading gainers amid hopes more monetary stimulus will drive commodity prices higher.

BHP Billiton (ASX:BHP) rose 1% and Rio Tinto (ASX:RIO) added 4.2%.  Queensland Rail (ASX:QRN) advanced 2% after swinging back to a profit in FY11.

Among the big four, Commonwealth Bank (ASX:CBA) edged up 0.3% after launching a $373 million bid for Count Financial (ASX:COU).  National Australia Bank (ASX:NAB) closed up 1.6%.

In the retail space, Harvey Norman (ASX:HVN) put on 1% after it reported a 9% lift in FY11 net profit.

Also making earnings news was CSR Ltd (ASX:CSR), which downgraded its 1H11 guidance due to a restructuring of its Viridian glass business.  The group’ shares sank 7% for the week.

The big focus this week will be on tomorrow’s RBA interest rate decision and the domestic jobs report, which is slated for release on Thursday.

The market is pricing in no change to the official cash rate (currently at 4.75%), whilst the unemployment rate is expected to remain at 5.1%.

Economics

Last week’s mixed batch of data revealed an Australian economy still struggling for direction amid the recent market volatility.

On Tuesday, a report showed building approvals rising 1% in July from June.  The result missed economist expectations of a 2.1% rise and highlighted continued weakness in the building sector.

However investors were buoyed by Thursday’s data, which showed retail sales and private capital expenditure exceeding estimates.

Retail sales rose 0.5% in July, reversing two straight months of declines.  The result was driven by increased purchases at department stores.

Private capital expenditure rose 4.9% in the June quarter, beating estimates of a 4.1% gain.

Both results were encouraging and highlighted some resilience among Australian businesses and consumers in the face of global economic uncertainty.

Overseas

Renewed fears over a double dip recession in the US sent global markets into a tailspin on Friday night, reversing the week’s earlier gains.

On Friday night, Wall Street was left reeling after data showed the US economy adding no net jobs in August, well below expectations of a 74,000 gain.

The data again highlighted the precarious state of the US economy and saw the Dow finish 0.4% lower for the week.  The S&P500 (-0.2%) and Nasdaq (unchanged) also erased their early week advance.

It was a similar outcome on the major European indices, although they at least managed to hold on to their gains.

The battle to contain the region’s debt crisis received a setback on Friday, with Greece and its lenders failing to reach an agreement on the country’s ability to meet its deficit goals.

For the week, the FTSE added 3.2%, the French CAC put on 2%, whilst the German DAX ended flat.

In the Asian region, the Hang Seng rose 3.2%, the Nikkei advanced 1.7% whilst the Shanghai Composite fell 3.3%.

The prospect of further monetary stimulus in the US drove the key commodities higher.  Oil edged up 1.3% whilst gold continued its march towards fresh all-time highs, adding 4.4% for the week.

Base metals were mixed, with aluminium among the best performing (+2.5%).

   Written by: marketpulse   Other posts from: marketpulse

The Aussie market strengthened last week, with the gains driven by positive corporate earnings and hopes for further stimulus by the US Federal Reserve.

The ASX 200 climbed 98 points (+2.4%) for the week, closing at 4200.

BHP Billiton (ASX:BHP) headlined the companies reporting their results last week.  The mining giant put on 3% after reporting a record FY11 net profit of US$23.6 billion.

Bluescope Steel (ASX:BSL) confirmed its perilous position after reporting a FY11 net loss of $1.05 billion. Despite the loss, BSL rose 3.8% on plans to downsize its workforce.

Origin Energy (ASX:ORG) drove the energy sector higher (+6%) following its bullish FY12 outlook.  Oil Search (ASX:OSH) was another solid performer (+4.7%) after its 1H11 net surged 117%.

Among the big four, Westpac Bank (ASX:WBC) and ANZ Bank (ASX:ANZ) put on around 2% each.

Seek Ltd (ASX:SEK) had a forgetful week (-7.5%) after its disappointing FY11 profit.  However Qantas (ASX:QAN) flew 8.6% after its full year result beat estimates.

Woolworths (ASX:WOW) was the main drag on the market last week, slumping 4.7% on the back of its poor FY12 outlook.

Economics

Glenn Steven’s speech to parliament was the key economic event last week.

In his testimony, the RBA governor signalled interest rates were likely to remain on hold for the foreseeable future.

Stevens noted the recent market turmoil presented challenges to the world economy, but also said that domestic inflation beared ‘careful watching’.

The comments dampened speculation of near-term interest rate cuts, and appear to have kept the RBA firmly on its longer-term tightening bias.

Overseas wrap

US markets ended sharply higher last week, with investors shrugging off mixed economic data and instead pinning their hopes on Ben Bernanke announcing new stimulus measures at the weekend’s Jackson Hole meeting in Wyoming.

Although Bernanke’s speech contained no specific plans for a QE3, stocks were nevertheless buoyed by his relatively benign assessment of the US economy.

Friday night’s advance rounded out a positive week for the Dow, which climbed 4.3% over the five sessions.  The S&P500 put on 4.8%, whilst the Nasdaq surged 5.9%.

The gains were less pronounced on European markets amid rumours the region’s leading nations are planning to extend short-selling bans.

For the week, the UK FTSE rose 1.8%, the German DAX advanced 1% and the French CAC strengthened 2.4%.

The Shanghai Composite was the biggest mover in the Asian region, rising 3.1% for the week.  The Hang Seng and Nikkei were up a more modest 0.9% each.

Gold was sold-off heavily towards the end of the week amid profit-taking and after the CME raised margining requirements on bullion futures.  The precious metal shed 3% for the week.

Other commodities were generally stronger, with oil adding 3.6% on supply concerns in the US and the Middle East.  Lead was the best performing base metal, rocketing 7.8% over the week.

   Written by: marketpulse   Other posts from: marketpulse

Renewed fears over the deteriorating health of the US economy hammered the Aussie market on Friday, with the session’s losses wiping off all of the week’s earlier gains.

The ASX 200 dropped 71 points (-1.7%) for the week, closing at 4102.

Reporting season also kicked into high gear last week, with some of the major companies releasing their results.

In the financial space, ANZ Bank’s (ASX:ANZ) disappointing third quarter profit saw it shed 2.1%.  Westpac (ASX:WBC) was hit even harder (-4%) after reporting a fall in its 3Q11 cash profit.

The big miners came under renewed pressure amid fears a global downturn will sap commodity demand.  BHP Billiton (ASX:BHP) lost 1.9% and Rio Tinto (ASX:RIO) fell 2.9%.

Newcrest Mining (ASX:NCM) was off 2.9 despite surging bullion prices and a big jump in its full year profit.

Energy giant Woodside Petroleum (ASX:WPL) also announced a lift in first half earnings yet still backtracked 4.3% for the week.

Among the industrials, Leighton Holdings (ASX:LEI) had a stellar week (+7.9%) after its full year profit came in line with its guidance.

Wesfarmers (ASX:WES) was another strong performer (+3.8%) after its full year result jumped on the back of its successful Coles turnaround.

Economics

The main focus last week was on the RBA minutes for August, with investors looking for clues on the future direction of interest rates.

The minutes showed the central bank decided against hiking rates this month due to the recent market turmoil.

Downside risks to demand had increased and as a result, the medium-term outlook for inflation had dampened.

However the RBA warned that underlying inflation was still expected to track higher, necessitating the need for further tightening down the track.

The latest Wage Price Index (WPI) reading also seemed to back up the RBA’s benign medium-term outlook on inflation.

The WPI rose 0.9% in the June quarter, which was slightly less than economist expectations of a 1% rise.

A slowing domestic economy appears to have kept the lid on wage growth, reducing the pressure on the RBA to lift interest rates.

Overseas wrap

Overseas stocks were caught up in another major sell-off towards the end of last week, continuing the volatility that has plagued markets this month.

Renewed fears about the US economy were triggered by data showing a massive contraction in Philadelphia-area manufacturing activity.

All of the key US indices suffered major losses, with the Dow (-4%), S&P500 (-4.7%) and Nasdaq (-6.6%) on track for their worst month since the height of the GFC in October 2008.

European stock didn’t fare much better, with the region’s sovereign debt crisis further eroding market confidence.

The DAX (-8.6%) was punished heavily by investors after data showed the German economy screeching to halt in the June quarter.  The FTSE was also hit hard, sinking 5.2% for the week.

Asian markets managed to escape the punishment meted out to their US and European counterparts.  The Hang Seng slipped just 1.1%, Shanghai Composite fell 2.3% and Nikkei gave up 2.7%.

The heightened risk aversion drove investors to the relative safety of gold, which surged 6.4% to another record high.

Oil and some of the base metals struggled amid concerns a global slowdown will sap demand for commodities.

   Written by: marketpulse   Other posts from: marketpulse

There was massive volatility on the Aussie market last week, with the wild gyrations fuelled by concerns over Euro-zone debt and fears over a possible US recession.

Local sentiment was dented further after reports showed another big drop in consumer sentiment and a surprise rise in Australia’s unemployment rate.

Yet despite the volatility, the ASX 200 climbed 67 points (+1.6%), closing at 4173.

The big banks were key drivers of last week’s gains.  National Australia Bank (ASX:NAB) and Commonwealth Bank (ASX:CBA) put on around 5% each after reporting bumper profit results.

Telstra (ASX:TLS) was another big mover among the blue chips, rising 5.5% after its full year profit topped estimates.

Newscorp (ASX:NWS) was a market outperformer (+11.3%) after its quarterly profit jumped 45%.

Among the retailers, JB Hifi (ASX:JBH) surged more than 10% after flagging a lift in FY12 sales.  Harvey Norman (ASX:HVN) slipped despite reporting a modest rise in its FY11 sales.

In the mining space, Rio Tinto (ASX:RIO) dipped 0.7% following its bid for Coal & Allied (ASX:CNA).  BHP Billiton (ASX:BHP) edged up 0.2% for the week.

Economics News:

Poor domestic economic data was a key driver of last week’s market volatility.

On the employment front, the ANZ Job ads survey pointed to a continued slowdown in employer hiring intentions.  The latest survey showed the number of job ads declining 0.5% in July.

The bleak jobs picture was made worse after data showed Australia’s unemployment rate unexpectedly rising from 4.9% in June, to 5.1% in July.

The economy also shed 100 jobs in July, which was far below expectations of a 10,200 gain.

The poor jobs data, along with slumping business and consumer confidence, has raised the odds of a rate cut by the RBA in coming months.

Overseas Market and Commodity Wrap

It was a rollercoaster ride on global markets last week, with the US economy and Europe’s debt crisis weighing heavily on investor minds.

In the US, the Dow swung more than 400 points in four consecutive sessions – the first time in history – as the Fed affirmed plans to leave interest rates at zero until mid-2013.

The Fed’s statement went someway to easing the market’s nerves, although the Dow (-1.5%), S&P500 (-1.7%) and Nasdaq (-0.9%) still ended the week in negative territory.

In Europe, the ECB began buying Italian and Spanish bonds in an attempt to reign in the two countries’ soaring interest rates.

However investors remained sceptical over the region’s debt, with the German DAX in particular, sliding 3.8%.  The French CAC dropped 2%, whilst the UK FTSE surprisingly gained 1.4% for the week.

Asian markets were hit hard on concerns a global economic slowdown will sap demand for their exports.  The Hang Seng tumbled 6.3%, the Shanghai Composite fell 1.3%, and the Nikkei dropped 3.6%.

The risk aversion spurred a major flight into safe-haven assets, with gold surging 5.6%.  Oil clawed back some heavy early losses but still ended the week down 1.7%.

A resurgent US dollar weighed on other commodities, with copper giving up 1.9% and nickel shedding 4.9%.

   Written by: marketpulse   Other posts from: marketpulse

The Aussie market suffered its steepest drop since the height of the GFC last week, with the panic-selling driven by fears the US economy is sliding back into recession.

The RBA’s decision to leave interest rates unchanged had little impact on sentiment, whilst this weekend’s US debt downgrade is likely to cause even further volatility in the market.

The ASX 200 plunged 319 points (-7.2%), closing at 4105.4.

Mining companies bore the brunt of last week’s selling amid fears a global recession will sap commodity demand.

BHP Billiton (ASX:BHP) lost 8%, whilst Rio Tinto (ASX:RIO) fell 10% despite its 1H11 net profit growing 30% from the prior year.

A huge fall in crude prices weighed heavily on the energy sector.  Woodside Petroleum (ASX:WPL) and Santos (ASX:STO) tumbled around 10% each.

The big banks were also caught up in the sell-off, with National Australia Bank (ASX:NAB) shedding 9.3% and Commonwealth Bank (ASX:CBA) dropping 6.1%.

Toll road operator, Transurban (ASX:TCL), didn’t fare as badly after reporting a surge in its full year profit.  TCL shares slipped 2.7% for the week.

Economic News. What Does it Mean?

A raft of poor global economic data was the catalyst for last week’s heavy fall on the stock market.  However, signs of a weakening domestic economy also weighed on sentiment.

The big event last week was the RBA’s decision to leave the official cash rate unchanged at 4.75%.

The decision was delivered against the backdrop of global market uncertainty, which the RBA admitted had the potential to derail the domestic economy.

The central bank noted that asset prices had softened in recent months and consumer demand was likely to remain weak in the near term.

As a result, the RBA slashed its 2011 Australian economic growth forecast from 3.25%, to 2%, when it released its June quarter monetary policy statement.

Sapping confidence further was Australian retail sales, which unexpectedly declined 0.1% in June. Economists were expecting a rise of 0.3% for the month.

The poor result was a clear reflection of consumers tightening their belts amid global uncertainty and the threat of further interest rate hikes.

Separately Australia’s trade surplus narrowed to $2.05 billion in June, from a revised $2.7 billion in May.  Exports were flat in June – no doubt hurt by the strong Aussie dollar – whilst imports rose 3%.

The market is now nervously eyeing this Thursday’s domestic jobs report, where the expectation is for the economy to have added 10,300 jobs in July.

However, a worse-than-expected result could shake confidence in the Australian economy and may add to calls for the RBA to lower the official cash rate.

Overseas Market and Commodity Wrap

Last week’s rout on global markets was the biggest since the height of the GFC, with investors panicked over sovereign debt problems and the sickly US economy.

A last-minute agreement to raise the US debt ceiling failed to lift the market’s mood, as attention turned to a raft of weak global manufacturing data and a surprise contraction in June US consumer spending.

All of the major US indices were punished, with the Nasdaq headlining the losses (-8.1%).  The Dow shed 5.7% for the week, whilst the S&P500 fell 7.2%.

In Europe, the losses were more pronounced; the FTSE (-9.8%), German DAX (-12.9%) and French CAC (-10.7%) plunged amid concerns the EU will be unable to contain the region’s debt crisis.

Asian markets were also battered, although the Shanghai Composite escaped the brunt of the selling, down just 2.8% for the week.

The US dollar rallied against its major rivals, with investors lured by its safe-haven appeal.  The safe-haven buying supported gold, which rose another 1.3% to a new all-time high.

Oil was tanked 9.2% to below US$90 a barrel amid concerns over energy demand, whilst base metals were also sold down heavily, with zinc down 11.6%.

   Written by: marketpulse   Other posts from: marketpulse

The Aussie market staged a big rebound last week, which was driven by takeover activity and the EU’s decision to hand Greece a second bailout package.

The ASX 200 advanced 129 points (+2.9%), settling at 4603.

Eastern Star Gas (ASX:ESG) outpaced the market last week after agreeing to a $730 million offer from Santos (ASX:STO).  Shares in ESG flew 50.4% whilst STO rose 1.1%.

In the materials sector, Sundance Resources (ASX:SDL) rocketed 33.8% after receiving a $1.44 billion from majority shareholder, Hanlong.

Stronger bullion prices failed to lift Newcrest Mining (ASX:NCM), which was off 0.6% following its latest production update.

The big banks recovered some of their recent losses following the Greece bailout package.

Westpac Bank (ASX:WBC) put on 5%, while Commonwealth Bank (ASX:CBA) added a more modest 3.1% amid news its CEO is planning to retire in November.

M&A action also buoyed ConnectEast Group (ASX:CEU), which surged 22.7% on the back of a $2.1 billion offer from investment firm, CP2.

However, Austar United (ASX:AUN) had a forgetful week after the ACCC blocked its proposed tie-up with Foxtel.  AUN shares tumbled 18.7% for the week.

Economic News. What Does it Mean?

There were two key economic releases last week; the latest RBA meeting minutes and business confidence data.

The RBA released its minutes on Tuesday, where the central bank is signalled it is in no rush to raise interest rates.

The boards acknowledged the slow recovery from the Queensland floods and weaker consumer spending were hampering the economy.

Furthermore, a worsening global economic outlook was presenting new threats to the financial sector.

Nevertheless, the RBA indicated that the future path of interest rates would likely be determined by this week’s domestic CPI report.

The tentative approach by the RBA was reinforced on Thursday, when it was revealed business confidence plunged in the June quarter.

Confidence was weighed down by a higher dollar and cautious consumer spending and global financial uncertainty.

The NAB business survey showed confidence slumping from +11 in the March quarter, to just 6 in the June quarter.

Although the immediate outlook for business conditions had dampened, firms still had a somewhat optimistic outlook for the next 12 months.

This was most likely a reflection of the expected surge in economic activity due to the mining boom.

Overseas Market and Commodity Wrap:

Global markets bounced back last week, as European and American debt fears were overshadowed by surprisingly good profit results from companies in the US.

Investors put all of the recent gloom behind them and focused on the increasing profitability of American companies. Tech giant IBM and Apple announced knockout results during the week.

US markets reversed their losses almost exactly from the week before, with each of the three indices finishing firmly in the black. The Dow Jones rose 1.5%, while the S&P 500 climbed 2.2% and the Nadsaq added 2.5%.

European markets also performed well, with the UK (+1.6%), the German (+1.5%) and French (+3.1%) markets all rising on the back of the latest EU bailout plan for Greece.

Asian markets were mostly stronger, helped by strong gains on Friday.

The Hang Seng firmed 2.6% and the Nikkei gained 1.6% but the mainland Chinese market dropped 1.7%. The Australian market jumped 2.9% last week.

Commodities prices mostly rose last week, as traders sought out riskier assets once again.

Oil prices rose 2.7% on the back of higher demand expectations and while investors sought out growth assets, gold continued its climb to record levels, up 0.7% for the week.

Base metals were mixed last week. While aluminium (+4%) and zinc (+5%) soared, copper was flat and lead and nickel each dropped around 1%.

   Written by: marketpulse   Other posts from: marketpulse

The Aussie market suffered its biggest weekly fall since March amid heightened fears over global debt contagion and a slowing domestic economy.

The ASX 200 lost 181 points (-3.9%), settling at 4474.

Sagging consumer confidence and a sharp profit downgrade from David Jones (ASX:DJS) triggered major losses among the retailers.

DJS was the hardest hit, plunging 23% for the week.  Rival Myer Holdings (ASX:MYR) slumped 9%.

In the media space Newscorp (ASX:NWS) sank almost 12%, as its deepening phone hacking scandal overshadowed a US$5 billion share buyback announcement.

The major banks also finished off the pace due to fears over rising funding costs.  Commonwealth Bank (ASX:CBA) fell 5.3% and ANZ Bank (ASX:ANZ) tumbled 6.8%.

Takeover activity buoyed some of the domestic coal stocks.  Macarthur Coal (ASX:MCC) surged 35.5% following an offer from Peabody and ArcelorMittal.

BHP Billiton (ASX:BHP) also made M&A news after lobbing a US$15 billion bid for US-based shale gas company, Petrohawk.

Rio Tinto (ASX:RIO) dropped 3.5% despite reporting a rebound in quarterly iron ore production.

Economic News. What Does it Mean?

Business and consumer confidence data released last week was the major Australian economic news, with both sides reporting a drop in confidence.

On Tuesday, NAB data showed business confidence had dropped to a neutral reading of zero, down from six.

The retail and construction sectors were particularly negative, amid trying times for retailers and a stagnating housing sector.

Consumer confidence also fell sharply in July, with Australians turning sour in the face of European debt concerns and the carbon tax.

The Westpac consumer confidence index slumped 8.3% in July to 92.8 – the lowest level since the height of the GFC.

However, the poor result also suggests the RBA may hold fire on raising interest rates in August, providing some relief to consumers already faced with higher living costs.

Overseas Market and Commodity Wrap:

Global equity and commodity markets took another tumble last week, as European debt fears spread and the United States saw its credit rating under threat.

In Europe, Ireland saw its credit downgraded to junk status, following Greece and Portugal, with Italy and Spain next in line to see rating cuts.

This put European shares under severe pressure, as investors pondered the implications of a potential sovereign default. The UK market dropped 2.4% for the week, the German market fell 2.5% and the French market slumped almost 5%.

In the US, the European debt worries were compounded by the two big ratings agencies – Standard & Poors and Moody’s – both threatened to downgrade the United States’ AAA credit rating unless Congress raised its debt ceiling and made some headway on the budget deficit.

The focus on global debt overshadowed what was otherwise a positive week of earnings reports from American companies, which included knockout results from tech giant Google and banking behemoth JP Morgan.

The Dow Jones shed 1.4%, the S&P 500 lost 2.1% and the Nasdaq dropped 2.4%.

Most Asian markets also struggled. The Hang Seng slumped 3.7% and the Nikkei finished the week with a 1.6% loss. The Chinese market was virtually the only major index to finish in positive territory, gaining 0.8% for the week.

Commodity prices were mixed. Gold continued its march higher, climbing to fresh record highs as investors abandoned shares for safer assets.

Oil prices rose 1.1%, but base metals mostly closed lower. Aluminium was the weakest, down 2.8% for the week.

   Written by: marketpulse   Other posts from: marketpulse

The Aussie market gained ground last week as jobs data in the US allayed fears the world’s biggest economy was heading back into recession.

We finished the week up a whopping 64 points (+1.4%) at 4655.

Investors received some relief in the form of the RBA’s decision to keep interest rates on hold and positive jobs data.

The materials sector led the gains with the big miners firing.

BHP Billiton (ASX:BHP) tacked on 2.7% and Rio Tinto (ASX:RIO) climbed 1.8%.

Murchison Metals (ASX:MMX) was one of the worst performers of the week, dropping nearly 10% after announcing a delay and cost blowout at its project.

The airlines stocks flew as Qantas (ASX:QAN) and Virgin Blue (ASX:VBA) took advantage of Tiger Airways’ demise.

The big four banks were mostly weaker with only National bank (ASX:NAB) gaining ground, up 1%.

Economic News. What Does it Mean?

There was plenty of economic action last week, mostly concerning jobs and interest rates.

The action started on Monday with job ads, which were up 3.7% in June, recovering from a 6.5% drop in May.

The positive news was outshone by retail sales numbers, which dropped 0.6% in May, massively disappointing the market which had expected a 0.3% rise.

The market and the Aussie dollar fell on the news, as investors virtually wiped out all chance of a rate rise the next day.

As expected, the RBA kept interest rates on Tuesday, but still provided a few surprises in its comments.

The Reserve Bank board said that its mildly restrictive monetary policy remains appropriate for now, as it balances the effect of the mining boom against weakness elsewhere in the economy.

The statement noted that employment growth had moderated in recent months and a slower pace of employment growth is likely to continue.

With CPI expected to be close to target over the next 12 months, the RBA showed it is still concerned about inflation, but comments that underlying inflation is low saw the AUDUSD tumble slightly.

Financial markets are now pricing in a 70% chance of an interest rate cut by the end of the year, although the RBA still suggests the next move will be higher.

The big economic news later in the week was surprisingly strong unemployment data. The headline rate unemployment rate remained unchanged at 4.9%, as expected, but the jobs numbers was a positive surprise.

Total employment rose by 23,400 in June (above expectations for 15,200 extra jobs), but breaking down the numbers showed there was a surge in full-time employment.

This was a much needed kick for the local market, which has had a string of weak economic readings in recent months.

Overseas Market and Commodity Wrap:

Financial markets enjoyed another strong week, with equities and commodities putting on solid gains.

All three key US indices all finished ahead, albeit logging much more modest gains compared to the supercharged gains posted a week earlier.

With the positive debt developments in Greece wearing off, investors focused on the US which boasted mixed employment data at the end of the week.

The Dow rose 0.6% for the week, the S&P 500 inched 0.3% higher and the Nasdaq put on 1.6%. American companies will start reporting second-quarter earnings this week, which will drive the market for the next month.

In the UK the FTSE closed flat for the week, as media stocks fluctuated around the News of the World scandal and its effect on News Corp and its main rivals.

Asian markets put on strong gains, with Chinese markets (mainland China and Hong Kong) rising around 1.5%. The Nikkei rose 2.7%, with a weak yen helping to boost the key exporter stocks.

All the major commodity prices rose last week.

Oil prices rose 1.3% for the week, but had been up much stronger earlier in the week before a weak inventory reading and poor jobs data on Friday poured cold water on expectations of global energy demand.

Gold rose 4% as fears grew that the Euro debt crisis would spread to Ireland, Italy and Portugal. Other precious metals also closed with good gains. Silver (+8.5%) was the standout, followed by palladium (+2.5%) and platinum (-1.2%).

Base metals also logged good gains. Nickel rose 4%, while aluminium, copper and lead each gained around 2.5% for the week.

   Written by: marketpulse   Other posts from: marketpulse

The Aussie market had a solid week, finishing off the financial year with a bang.

An end of financial year buying frenzy saw the Aussie market finish the week up 83 points (+1.8%), settling at 4591.

The resources rallied on the back of a strong week for commodities.

The big miners BHP Billiton (ASX:BHP) and Rio Tinto (ASX:RIO) tacked on around 3% each.

Rare earths miner Lynas Corp (ASX:LYC) had a shocker, plunging around 14%, after the Malaysian government put restrictions on the development of its plant.

Energy stocks also had a good week with oil giant Woodside Petroleum (WPL) rising 1.7% after a strong week for oil prices.

The banks were also stronger with National Bank (ASX:NAB) and Westpac Bank (ASX:WBC) rising around 3% each.

Investment group Macquarie (ASX:MQG) continued to underperform, finishing the week a touch lower.

The defensive healthcare and utilities sectors were also among the best performers of the week.

Economic News. What Does it Mean?

There were no major economic announcements last week, although some important data was released this morning.

Retail sales dropped 0.6% in May, massively disappointing the market which had expected sales to actually rise 0.3% for the month.

The market and the Aussie dollar fell on the news, as investors virtually wiped out all chance of a rate rise at tomorrow’s RBA meeting. Investors had tipped next month’s meeting to be the earliest the RBA would act, although this is also now looking less likely.

Overseas Market and Commodity Wrap:

Global equity and commodity markets surged higher last week, as some positive developments in the Greek debt crisis helped to restore investor sentiment.

News that the Greek parliament passed two financial austerity bills saw assets bounce back sharply after weeks of selling.

US markets had their best week in two years, as each of the three major indices rose more than 5%. The Nasdaq (+6.1%) was the strongest, followed by the S&P 500 (+5.7%) and the Dow Jones (+5.4%).

European markets were equally as strong, recovering to their highest level in a month. The FTSE 100 in London rose 5.1% for the week.

Markets in Asia-Pacific also gained, albeit to a lesser degree.

The Nikkei was the strongest of the major Asian indices, rising 2% for the week. Chinese markets lagged on weak manufacturing data and fears of more rate hikes.

The Hang Seng rose 1% last week and the Shanghai Composite only managed to eke out a 0.5% gain.

The Aussie market in contrast rose 1.8% for the week.

Most commodity prices gained last week as investors switched back into risk assets.

Oil prices closed the week at US$94.94 a barrel, up 4.1% and during the week managed to move back above US$95 a barrel for the first time since emergency oil supplies were released into the market.

The major precious metals were rare losers last week, closing lower as investors switched out of safe-haven assets.

Gold dropped 1.3% for the week to US$1482 an ounce and silver dropped 2.7%. However, platinum and palladium finished the week ahead.

Base metals all finished in positive territory. Copper, lead, nickel and zinc all rose at least 3.7% last week.


   Written by: marketpulse   Other posts from: marketpulse