CMC Markets Weekly Report - 9th December 2013
U.S. stocks finished sharply higher on Friday, following an upbeat November jobs report. The jobless rate falling to a five-year low and a read on consumer confidence hit a five-month high.
The Dow Jones Industrial Average jumped 198.69 points, or 1.3 per cent, to 16,020.20. The S&P500 also rallied, ending the session at 1805.09 points, 20.06 points up or 1.12 per cent and the Nasdaq gained 29.36 points, or 0.7 per cent, to 4,062.52.
The government's jobs report found 203,000 jobs were added in November, with the jobless rate falling to 7.0 per cent. Analysts polled by Reuters had expected that 180,000 jobs were created last month, with unemployment marginally lower at 7.2 per cent.
Data on Thursday showed the economy grew faster than expected in the third quarter, fuelling fears the Fed could start tapering before year ends, rather than in first quarter 2014.
On Friday, stocks furthered their gains after The Thomson Reuters/University of Michigan's preliminary reading on consumer sentiment came in at 82.5 in December, beating analyst's expectations.
In commodity markets, US oil prices rallied along with the market. New York's main contract, West Texas Intermediate (WTI) for delivery in January, hit $US97.72. It later closed at $US97.38, up 18 US cents from Wednesday. Brent North Sea crude for January meanwhile was down 78 US cents at $111.10 at 0726 AEDT.
Gold prices fell after upbeat US economic data supported investor expectations for a reduction in Federal Reserve stimulus. The most actively traded contract, for February delivery, on Thursday fell $US15.30, or 1.2 per cent, to settle at $US1,231.90 a troy ounce on the Comex division of the New York Mercantile Exchange.
Metals closed mixed on the London Metals Exchange (LME) as profit-taking and jitters regarding the future of economic stimulus in the US weigh prices down. Aluminium and copper both closed lower, while other metals continued to bounce from recent lows, resisting these pressures.
But, at the close of open-outcry trading in the London ring, copper and aluminium had both succumbed to the effects of investors selling to lock in a profit after the metals shot higher Wednesday. LME three-month fell 0.4 per cent on the day to $US7,068 a ton while aluminium closed 0.8 per cent lower at $US1,758 a metric ton.
The Australian dollar has jumped more than three-quarters of a US cent after surprisingly strong Chinese trade data and good US jobs figures. At 0700 AEDT on Monday, the local unit was trading at 91.33 US cents, up from 90.50 cents on Friday.
In economic news on Monday, the ANZ job advertisements series for month just ended is due out. In China, data on producer and consumer prices is released and in the US, the employment index is issued.