Monday Market Minutes: Consolidation Time – ShareCafe
Investors won’t know what to focus on this week – the US second-quarter earnings season begins Thursday-Friday, with reports due from six major banks, the June consumer price index due for release, the US inflation, rising central bank rates and possibly better commodity prices.
This was after one of the best weeks in a long time for the markets, although commodities were again weaker.
The Nasdaq gained 0.12% to 11,635.31, while the S&P 500 fell 0.08% to 3,899.38. The Dow Jones closed down 46.40 points, or 0.15%, at 31,338.15.
The Nasdaq rose in five consecutive days for the first time this year.
For the week, the Nasdaq closed up 4.56%, while the S&P 500 gained 1.94%. The Dow lagged but still rose 0.77%.
Friday’s June jobs data surprised on the upside with 372,000 new jobs created last month, much better than the 250,000 expected by the market.
This continued what has been a strong year for job growth in America and it will be easier for the Federal Reserve to raise rates again by 0.75% at its next meeting on July 26-27.
Eurozone stocks rose 0.8% on Friday and the US S&P 500 eased and ASX 200 futures rose 20 points, or 0.3%, signaling a positive start to trading for the Australian equity market this morning.
In addition to the rise in US stocks last week, Eurozone stocks rose 1.7%, Japanese stocks gained 2.2% but Chinese stocks fell 0.8%.
Australian stocks followed the lead of the US with a 2.1% gain, one of the strongest this year, led by IT, consumer discretionary, healthcare and consumer stocks. real estate.
Bond yields generally rose, except in Australia. The US 10-year rate rose 8 points on Friday and 19 points over the week to end at 3.08%.
Oil, metals (especially copper) and iron ore prices fell.
The $A rose slightly despite a further rise in the US$.
The Australian dollar rose half a cent over the week to end at 68.62 after falling below 68 cents over the week.
The US jobs result for June was a case of, as one US analyst put it, “good news being bad” for markets because it means another big hike in US interest rates.
“Good news is bad news for the market today…you couldn’t ask for anything better from this jobs report in terms of broad gains, low unemployment, the number was above expectations,” said said Michael Arone of State Street Global Advisors. “Wages were increasing but at a slower pace. … It was a good thing, and yet the markets sort of shrugged here because at the end of the day, the conclusion is that the Fed is going to gain 75 basis points.