The ASX 200 edged lower 37 points (-0.9%) to close the week at 4251 – giving back some of the previous week’s gains.
Sectors were more or less weaker during the week with IT, telco and consumer discretionary the only ones finish in front.
The banking majors weighed on the market; NAB (ASX:NAB) lost 1.4%, whilst Westpac dropped 2.4%. During the week CEO Gail Kelly stressed that funding costs were higher now than any time during the GFC.
Energy stocks were varied; Santos (ASX:STO) advanced 1.5%, while competitor Woodside shed 1.1%.
Wesfarmers and Woolworths both reported solid quarterly sales growth for the December quarter, however both declined, losing 2.8% and 1.5% respectively for the week.
The solid sales growth by the supermarket giants translated into gains for the retailers. JB Hi-Fi (+6.7%), Myer (+4.4%) and David Jones (+6.8%) all performed strongly.
Economic News: What Does it Mean?
In economic news home sales, trade balance, and the NAB Business Confidence Survey were released last week.
New home sales fell by 4.9% in the month of December, with successive rate cuts by the RBA failing to have the desired impact.
Figures released by the ABS showed that the trade surplus increased by $336 million in January from December, which exceeded economists’ forecasts.
The surplus last month was a seasonally adjusted $1.7 billion compared to a forecast $1.2 billion.
Imports were up 1% for the period, whilst exports rose 2%.
Business confidence was higher in the month of December according to the NAB Business Confidence Survey.
According to the survey, the Business Confidence Index rose to +3 for the month, after a +2 reading in November.
The Business Conditions Index stayed steady at +1.
In the week ahead, all eyes will be on the RBA for its cash rate decision on Tuesday. The market is pricing in a roughly 60% chance of a rate cut.
Overseas Market and Commodity Wrap:
International markets strengthened last week amid encouraging economic data out of the US.
The US Labor Department said employers added 243,000 jobs in January after an increase of 203,000 positions in the previous month.
The median forecast of 89 economists in a Bloomberg survey was for an increase of 140,000 jobs. The jobless rate fell to 8.3%.
The US markets finished stronger, with the Dow (+1.6%), Nasdaq (+3.2%) and S&P 500 (+2.2%) all recording decent gains.
European markets also kept a focus on Greece, with the country’s debt swap deal edging closer to being complete.
Some of the biggest winners in Europe were the UK FTSE (+2.9%), the German DAX (+3.9%) and the French CAC (+3.3%).
Asia was mixed for the week, with US nonfarm payrolls data not hitting the markets till after they were closed.
China did release PMI data, which showed that manufacturing is still growing, but this had little effects on the markets.
The Hang Seng put on 1.3% and the Nikkei slipped 0.1%.
Commodities were mixed; Palladium (+2.7%) was the best of the gainers, with lead (-3.1%) the worst of the losers.
Oil and gold were also mixed; gold added 0.3%, while oil fell 1.7%.