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CMC Markets Weekly Report - 3rd March 2014

U.S. stocks lost much of their gains on Friday, following rumours of a possible Russian action in the Ukraine.

The Wall Street Journal, quoting Russia's Interfax news agency, reported Ukraine's acting president claimed Russia sent troops to Crimea and seized Parliament. This followed unconfirmed reports from the BBC and AFP that Russian troops may have entered Crimea.

Equities had rallied amid a slew of economic reports that had consumer sentiment in February coming in just above expectations increasing from 81.2 to 81.6 in February. Existing-home sales holding steady up 0.1 per cent in January and the U.S. economy growing at a slower-than-previously estimated pace in the final quarter of 2013. Preliminary figures showed the US economy grew at a 2.4 per cent annual rate in the December quarter, just short of forecasts but down from the 3.2 per cent ��flash�� reading.

The Dow Jones Industrial Average rose as much as 126 points, and ended up 49.06 points, or 0.3 per cent, at 16,321.71. The S&P500 rose 5.16 points, or 0.3 per cent, to 1,859.45 whilst the Nasdaq eased by almost 11 points or 0.3 per cent.

In commodity markets, Oil prices pushed higher. New York's main contract, West Texas Intermediate for April delivery, rose to $US102.59 ($A114.91) a barrel on Friday, a modest increase of 19 US cents from Thursday's close. In London trade, Brent North Sea crude for April added 11 cents to settle at $US109.07 a barrel.

Gold futures fell as a record-breaking rally in US stocks sapped investor demand for haven assets. Gold for April delivery, the most active contract, on Friday closed down $US10.20, or 0.8 per cent, at $US1,321.60 a troy ounce on the Comex division of the New York Mercantile Exchange.

Base metals on the London Metal Exchange (LME) closed mixed, with nickel closing higher. At the close of open-outcry trading in the London ring, LME three-month copper on Friday was 0.3 per cent down on the day at $US7,005 a metric ton. Three-month aluminium fell 0.8 per cent to $US1,753 a ton. Nickel closed 1.9 per cent higher on the day at $US14,700 a ton.

The Australian dollar is weaker as escalating tension between the Ukraine and Russia dilutes appetite for riskier assets. At 0700 AEDT on Monday, the local unit was trading at 89.01 US cents, down from 89.56 cents on Friday.

In local economic news on Monday, the Reserve Bank of Australia releases the index of commodity prices for February and the Australian Bureau of Statistics (ABS) releases business indicators for the December quarter.

The ANZ job advertisements series, the TD Securities-Melbourne Institute inflation gauge and the Australian Industry Group performance of manufacturing (PMI) index, all for February, are due out as is the Housing Industry Association new home sales for January.

No major equities news is expected.

In the US, personal income, auto sales, constructions spending and the ISM manufacturing index is expected.

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