Aussie shares had a volatile week, with the debt focus moving from Greece to Italy causing havoc on our market.

Despite the uncertainty, the ASX 200 gained 15 Points (+0.4%) for the week to finish at 4297.

The week’s major economic event was the fall in Australia’s unemployment rate from an upwardly revised 5.3% in September, to 5.2% in October.

The big resources did not fare too well for the week; Rio Tinto (ASX:RIO) shed 0.8% and rival (ASX:BHP) lost 0.4%. Fortescue was a notable underperformer, dropping 5.1%.

In the energy sector Woodside lost 1.1%, while Santos (ASX:STO) had a good week, rising by a solid 3.4%.

The big four banks had mixed results, with Westpac and NAB (ASX:NAB) falling by 4.7%, and 2.4% respectively. However the losses were primarily due to the stocks going ex-dividend.

The retailers had a good week with Woolworths up 2.2% and JB Hi-Fi climbing 7.1%. Myer jumped 4.5% for the week after it confirmed guidance for the remainder of the financial year.

Economics

The week’s main economic focus was the domestic employment picture.

On Monday, the ANZ Job ads survey showed the number of advertisements falling 0.7% in October.

The result was an improvement on September’s 2.2% decline, signalling that employers are becoming less pessimistic about the domestic economy.

The official jobs result, which was released Thursday, appeared to validate this assessment.

The economy added 10,100 jobs in October, which comprised of a 20,000 gain in full-time jobs and decline in part-time jobs of 9,900.

The unemployment rate fell from 5.3% in September to 5.2% in October, which was better than economist estimates.

The growth in jobs was an encouraging sign in the face of global market instability, and highlighted the underlying strength of the Australian economy.

In other economic news, Australia’s trade surplus narrowed to $2.56 billion in September, from a revised $2.95 billion surplus in August.

The result was well below economist expectations of a $3 billion result, and reflected a 3% drop in exports.

Overseas

Most of the major indices ended higher last week despite the ongoing debt saga in Europe.

Italy was the focus of everyone’s attention, with the nation triggering a huge sell-off mid-week amid concerns over its spiralling borrowing costs.

The political turmoil ended up with PM Silvio Berlusconi resigning and the Italian senate voting to approve a set of austerity measures.

Those latest developments had a calming effect on the markets, and helped the Dow (+1.4%) and S&P500 (+0.9%) end the week in positive territory.

European indices also closed in the positive, with the FTSE adding 0.3%, the DAX putting on 1.5% and the CAC rising 0.8%.

Asian markets weren’t so fortunate, however, with the Hang Seng and Shanghai Composite down more than 3% each on concerns over a slowing Chinese economy.

It was a mixed bag among the commodities. Nickel (-4.4%) and copper (-2.9%) struggled, whilst oil surged 5% amid hopes an improving US economy will spur energy demand.

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The Australian market fell last week, with Europe’s debt crisis playing havoc with investor sentiment.

The market failed to fire despite the RBA cutting the official cash rate for the first time in two and a half years.

The ASX 200 fell 72 points (-1.7%) for the week, closing at 4281.

The retailers didn’t get much benefit from the rate cut; David Jones sank 8.8% and JB Hi-Fi tumbled 7.9%.

Most of the big resource stocks weakened; Rio Tinto (ASX:RIO) dropped 0.3% and BHP (ASX:BHP) fell 1.9%. However Fortescue bucked the trend, finishing up 1.6% for the week.

The energy majors were mixed with Woodside climbing 1.9% and Santos (ASX:STO) falling by 0.6%.

The big banks struggled, with Westpac falling 2.6% and ANZ (ASX:ANZ) slumping 4.8% for the week.

The two majors both reported record full year profits, but came under pressure after their earnings missed analyst estimates.

Economics

Last week’s key economic event was the RBA’s decision to cut the official cash rate by 25 basis points to 4.50%.

The move was widely anticipated by economists and came on the back of recent data showing moderating inflationary pressures.

The central bank cited the global volatility as a key reason behind what was its first rate cut in two and a half years.

The RBA said that CPI was above its target band but was beginning to decline amid slowing economic growth in Australia, China and the US.

It further noted that the high Aussie dollar had contained inflation and that confidence outside the resources sector was subdued.

The focus now turns to this Thursday’s jobs data, which will offer further insight on the extent of the non-mining sector slowdown.

Earlier today, we had data showing the number of job ads falling 0.7% in October, which doesn’t bode well ahead of the official release.

Overseas

Volatility returned with a vengeance last week, with the major indices suffering major falls due to the ongoing saga that is Europe’s debt crisis.

In a move that surprised everyone, Greece’s Prime Minister called for a referendum on whether his country should accept the next tranche of its bailout money.

EU leaders were blindsided by the move, particularly as they spent much of the prior week coming up with an agreement to help Greece and other struggling eurozone countries.

The call for a referendum spooked markets, which feared a ‘no’ vote would be the likely outcome, thus leading to a disorderly Greek default.

However the Greek PM backed off this threat towards the end of the week, helping to calm nervous investors.

US markets snapped their weekly winning streak due to the crisis, with the Dow (-2%), S&P500 (-2.5%) and Nasdaq (-1.9%) all ending lower.

European indices suffered even heavier losses, with Germany and France sinking more than 6% each.

Across Asia, the Shanghai Composite bucked the negative trend to finish up 2.2% amid hopes China will take steps to stimulate its economy.

Most commodities weren’t spared from the global rout, with aluminium and nickel slumping more than 4% each.

There were some minor exceptions, however, with gold (+0.5%) and oil (+1%) eking out modest gains for the week.

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The Aussie market rallied strongly last week after EU leaders struck a deal that could potentially put an end to the region’s debt crisis.

The ASX 200 soared 211 points (+5.1%) for the week, closing at 4353.

Resource stocks were the week’s big movers amid hopes the EU deal will lead to a pickup in global economic growth.

Easing fears over falling iron ore prices buoyed the bigger miners; BHP (ASX:BHP) rose 8.4%, Rio Tinto (ASX:RIO) flew 12.2% and Fortescue jumped 17.6%.

The energy majors got a big lift from surging oil prices; Woodside climbed 7.8% and Santos (ASX:STO) advanced 8.9%.

The big banks were stellar performers, with NAB (ASX:NAB) leading the charge (+6.9%) after reporting an FY11 cash profit of $5.5 billion.

It was a mixed bag among the retailers, with Billabong flying more than 20% after a forecasting a brighter FY12.

However Woolworths and Pacific Brands fell more than 1% after warning of still difficult trading conditions.

Economics

The key economic even last week was September quarter CPI.

Although headline CPI matched expectations of a 0.6% rise on the quarter, the trimmed figure of 0.3% came in below estimates.

Annualised trimmed CPI came in at 2.3%, which was comfortably within the RBA’s 2% – 3% target band.

Given the recent economic and market volatility, the RBA may now feel it can cut rates without renewing inflationary pressures.

The central bank is scheduled to make its decision tomorrow at 2:30pm, AEST, with most economist tipping a 25 basis point cut in the official rate.

Overseas

A potential resolution to Europe’s debt crisis fuelled big gains across the international indices last week.

On Wednesday, EU leaders outlined a plan that would force banks to recapitalise by June 2012, and expand the EFSF to more than 1 trillion euros, with potential backing from China.

That triggered an intense rally on European markets, with the FTSE up 3.9%, the Dax soaring 6.3% and the CAC jumping 5.6%.

The major US indices received an added boost from surprisingly strong GDP and consumer confidence data; the Dow, S&P500 and Nasdaq shot up more than 3.5% each.

Strong Chinese manufacturing data eased fears of a slowdown in Asia, and sent regional bourses surging. The Hang Seng flew 11.1%, the Shanghai Composite put on 6.7% whilst the Nikkei added 4.3%.

Commodities also bounced higher amid renewed risk appetite and a brightening outlook for the global economy.

Gold and oil tacked on almost 7% for the week, whilst copper and silver skyrocketed more than 13% each.

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The Aussie market extended its rally last week amid progress by EU leaders to resolve the region’s debt crisis.

The ASX 200 added 43 points (+1%) for the week, closing at 4206.

Financials drove the week’s gains as concerns eased over their counterparty exposure to Europe’s lenders.  Westpac (ASX:WBC) rose 1.7% and Commonwealth Bank (ASX:CBA) put on 1.7%.

Rebounding commodity prices lifted some of resource majors.  Rio Tinto (ASX:RIO) strengthened 2.9% however BHP Billiton (ASX:BHP) slipped 0.9%.

The two airliners performed strongly despite their contrasting fortunes.

Virgin Blue (ASX:VBA) soared 9.5% after announcing an alliance with Singapore Airlines, whilst Qantas (ASX:QAN) climbed 4.3% despite facing widespread strikes by disgruntled workers.

Fletcher Building (ASX:FBU) underperformed the broader market following a disappointing 1Q trading update.  FBU shares sank 17% for the week.

Economics

The domestic employment picture was the key economic focus last week.

On Monday, the ANZ Job ads survey highlighted demand for new workers declining in September.

The survey showed the number of ads falling 2.1% for the month, as employers scaled back hiring intentions in the face of recent global volatility.

Newspaper ads were flat on-month, whilst internet ads declined 2.2%.

As it turned out the official data, which was released on Thursday, wasn’t as bad, and instead surprised to the upside.

The unemployment rate dropped to 5.2% in September from 5.3% in August.  The result beat expectations of no change in the jobless rate.

The economy added 20,400 jobs in August, above estimates of a 10,000 gain.  Full-time employment increased by 10,800, whilst part-time jobs grew 9,600.

The deterioration in hiring intentions didn’t stop employers from adding more staff to payrolls.

This suggests the economy may be in stronger shape than many people think, potentially reducing the need for the RBA to cut interest rates.

Overseas

The major international indices continued their rebound from September’s sell-off, as global leaders presented a united front to tackle Europe’s debt crisis.

The rally was fuelled predominantly by reports EU officials are pressing ahead with plans to release the next tranche of Greece’s bailout money and recapitalise the region’s banks.

Germany led the advance in Europe, surging 5.1% for the week.  The FTSE rose 3.1% whilst the French CAC added 3.9%.

A mixed start to the US earnings season failed to dent investor optimism. The S&P500’s 6% weekly gain was its biggest in more than two years.  The Dow finished up 4.9%.

The Nasdaq’s 7.6% surge was driven in large part by Apple, which rallied amid record demand for its iPhone 4S.

Asian indices enjoyed solid gains, with the Hang Seng rising 4.5% and Shanghai Composite appreciating 3.1% despite concerns over runaway inflation in China.

Commodities also took part in the global rally, with oil increasing 4.6% amid renewed optimism over energy demand. Precious metals strengthened on the back of a weaker US dollar.

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The Aussie market bounced back from last Monday’s plunge, finishing the week stronger amid hopes Europe’s leaders are making progress on the region’s debt crisis.

Initial fears about a Greek default gave way to optimism over moves to recapitalise the eurozone’s struggling banks.

The ASX 200 jumped 154 points (+3.8%) for the week, closing at 4163.

Resource stocks were the week’s best performers, as fears of a European-led recession eased.  BHP Billiton (ASX:BHP) rose 6.2% and Rio Tinto (ASX:RIO) climbed 7.4%.

Sundance Resources (SDL) put on 3.5% for the week after accepting a revised takeover offer from Hanlong.

The energy majors also enjoyed strong gains; Woodside Petroleum (ASX:WPL) added 8% whilst Paladin Energy (ASX:PDN) surged 27.6%.

Financials rallied alongside their global counterparts, with Westpac Bank (ASX:WBC) up 4.4% and National Australia Bank (ASX:NAB) advancing 6.2%.

Economics

The week’s key economic event was the RBA interest rate decision, and as expected, the central bank left the official cash rate unchanged at 4.75%.

The RBA indicated that it would wait on the 3Q CPI figures before contemplating whether to cut interest rates.

It acknowledged the economic turmoil gripping the US and Europe, but said it was too early to gauge the impact of this on the world’s other economic regions.

The RBA further noted that inflation was likely to remain within its preferred 2% – 3% target band in 2012 and 2013.

In other economic news, Australia’s trade surplus widened to $3.1 billion in August, from $1.8 billion in July.  The increase was higher than expected, and was driven by a surge in coal and iron exports.

Building approvals spiked 11.4% in August, much higher than economist forecasts of a 0.6% rise.

Retail sales also rose a stronger-than-expected 0.6% in August, following on from a 0.6% gain in July.

A now 10 month pause in the RBA’s monetary tightening cycle was the likely catalyst for the increase in retail sales and building approvals.

Retail sales were also being supported by the weaker Aussie dollar, which is prompting consumers to re-direct their spending on domestic goods.

Overseas

It was a broad-based rally on global markets last week, with investors pinning their hopes on reports EU leaders are pressing ahead with plans to recapitalise the region’s lenders.

With Greece on the verge of default, the ECB announced plans to provide unlimited year long loans to eurozone banks.

The move would aim to keep liquidity flowing in financial system in the event of a Greek default, and give banks time to repair balance sheets that are being strained by their sovereign debt holdings.

The EU progress lifted the region’s indices, with German, France and the UK all rising more than 3% for the week.

In the US, the Dow (+1.7%), S&P500 (+2.1%) and Nasdaq (+2.7%) strengthened ahead of Friday’s stronger-than-expected September jobs report.

Most commodities bounced back amid easing fears of another global recession.  Oil surged 4.8%, whilst nickel (+7.4%) and copper (+5%) were among the best performing base metals.

There was little movement in the Asian region, with the Shanghai Composite closed due to Chinese National Day Celebrations.

The Hang Seng strengthened 0.7% for the week whilst the Nikkei fell 1.1%.

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The Aussie market endured a heavy sell-off last week, with Europe’s escalating debt crisis crushing investor sentiment.

The ASX 200 tumbled 246 points (-5.9%) for the week, closing at 3903.

Mining stocks bore the brunt of the sell-off amid fears over commodity demand.  BHP Billiton (ASX:BHP) slumped 9.6% and Rio Tinto (ASX:RIO) sank 12.1%.

Concerns about falling rare earths prices weighed heavily on Lynas Corporation (ASX:LYC), which crashed 33.2% for the week.

The big banks also came under pressure last week; Commonwealth Bank (ASX:CBA) closed down 4.9% and National Australia Bank (ASX:NAB) dropped 8.1%.

Among the retailers, David Jones (ASX:DJS) fell 1.9% after a fall in its FY11 profit.  The group stuck to its 1H12 guidance, which provided some support for its share price.

Foster’s Group (ASX:FGL) was among the week’s few outperformers (+6%) after agreeing to a revised offer from SABMiller.

Economics

Last Tuesday’s monetary policy meeting minutes showed the RBA becoming more concerned over the global financial outlook due to Europe’s debt problems and a slowing US economy.

However the RBA gave no indication it was considering a rate cut, instead alluding to the strong conditions in the mining sector underpinning medium-term inflation.

The board said there was little data to help it assess the impact of recent global developments on inflation.

The statement didn’t appear as dovish as the market was expecting, lowering the odds of a series of rate cuts in coming months.

The RBA’s semi-annual financial stability report was also released last week.

The report showed that over the past year, domestic households were cutting back on spending to pay down debt and increase savings.

In a similar observation, credit growth had slowed to an annualised 4.5% in the six months to July.

Softness in the housing market also meant that mortgage arrears were drifting higher, as consumers contended with higher costs of living.

Overseas

Fears of a Greek default and an ensuing financial crisis triggered widespread carnage on global markets last week.

American markets were battered despite the Fed’s plans to stimulate the US economy by lowering long-term interest rates.  The Dow, S&P500 and Nasdaq slumped between 5% and 7% each.

Banking stocks were among the worst performers Europe amid fears over their exposure to sovereign debt.  The FTSE, DAX and CAC suffered similar falls to the key US indices.

The week’s biggest losers were commodities, which plunged as traders sold down their positions to cover losses in equities and other assets.

Gold (-9.6%), copper (-15.2%) and silver (-26.3%) bore the brunt of the selling ahead of the CME raising margining requirements on their respective futures contracts.

Other base metals also recorded double digit percentage falls on fears a slowing global economy will hurt demand for commodities.

The losses were more muted in Asia, where the Nikkei ended down 3.4% and the Shanghai Composite was off by 2%.

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Easing concerns over Europe’s debt problems helped the Aussie market finish off last week on a positive note.

The big plunge on Monday was mostly erased towards the end of the week as the world’s central banks stepped into ease liquidity problems in the European sector.

The ASX 200 shed 45 points (-1.1%) for the week, closing at 4149.

In the mining space, BHP Billiton (ASX:BHP) closed up 0.9% whilst Rio Tinto (ASX:RIO) ended flat.

Sundance Resources (ASX:SDL) was rocked by allegations of insider trading against the directors of potential suitor, Hanlong.

The stock was smashed early before recovering to finish the week up 1.1%, as concerns eased the takeover will be scuppered.

The big banks were hit amid fears their European counterparts will be suffer major losses due to their sovereign debt exposure.

Commonwealth Bank (ASX:CBA) slumped 3.9% and National Australia Bank (ASX:NAB) fell 2%.

Among the retailers, Myer Holdings (ASX:MYR) sank 8% after forecasting a disappointing FY12 profit outlook.

Economics

Last week’s mixed batch of economic data highlighted a disconnect between Australian businesses and consumers.

On Monday, data showed Australia’s trade surplus widening to $1.83 billion in July, from $1.82 billion in June.  The result slightly missed economist estimates of a $1.9 billion surplus.

Total exports and imports both fell in July, however commodity demand from Asia prevented a much bigger fall in exports.

Coal shipments were down for the month, whilst the strong Aussie dollar saw a healthy rise in capital equipment imports.

However the solid trade result was overshadowed by the NAB business confidence survey, which showed confidence plunging to depths not seen since 2009.

The business confidence index fell 10 points in August to -8.  Business conditions fell 2 points to -3.

The manufacturing, retail and construction sectors reported the worst conditions, offset partly by stronger conditions in the mining sector.

The dramatic fall in confidence doesn’t portend well for near-term business investment, and by extension, the domestic jobs market.

Yet in somewhat of a surprise, the Westpac Consumer Sentiment survey showed confidence rebounding sharply in September, reversing the prior month’s fall.

The consumer sentiment index rose 8.1% to 96.9.  In August, the index fell to 89.6, which was the lowest point since May 2009.

The rise in confidence reflected recent comments by the RBA, which signalled it is in no rush to raise interest rates.  Last week’s strong 2Q GDP result also provided a boost to sentiment.

The consumer sentiment data suggests a rate cut by the RBA may be the catalyst for a rebound in spending, delivering some hope to the beleaguered business sector.

Overseas

Global markets enjoyed strong gains last week amid hopes policy-makers will work to contain Europe’s debt contagion.

Investors were buoyed by a coordinated central bank move to provide liquidity to the Europe’s banks.

A joint pledge by Germany and France to keep Greece inside the eurozone also provided a much needed boost to confidence.

European markets rose on the back of last week’s developments.  The FTSE put on 2.9%, the French CAC was up 1.9% whilst the German DAX soared 7.4%.

In the US, the Dow rose 4.7%, the S&P500 closed up 5.4% and the Nasdaq jumped 6.2%.

Wall Street’s focus this week will be on the Fed’s FOMC meeting, with traders anticipating a new form of monetary stimulus will be announced by policy-makers.

The key Chinese markets didn’t participate in last week’s rally amid concerns the country’s economy will suffer in the event of a global downturn.

The Hang Seng shed 2.1%, the Shanghai Composite let go of 0.6% whilst the Nikkei advanced 1.4%.

Among the commodities, gold fell 2.4% due to reduced demand for safe-haven assets.  Oil inched up 0.8% for the week.

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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.

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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%).

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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