Key week for US economic data as indexes produce strong weekly gains

 

US equities were higher in Friday trading, finishing just off best levels. Each of the major averages were up more than 2.5 per cent for the week and snapped a big three-week losing streak during which S&P lost nearly 8.5 per cent.

This week, data wise we have the US Consumer price Index for August on Tuesday and the Producer Price Index a day later, along with US retail sales and that will be the last key data for the Fed to consider after the strong jobs data a week ago last Friday – all of which will help determine whether the Fed will hike the target range for the Fed Funds Rate by 50 or 75 basis points later this month.

On Friday, the Dow Jones Industrial Average gained 1.19 per cent to 32,151.71. The S&P 500 jumped 1.53 per cent while the Nasdaq Composite climbed 2.11 per cent

The case for the ongoing bear market is that the Fed will continue to tighten monetary policy, withdraw liquidity from the market and cause a tailspin for equities. Against this, this week’s market recovery has shown there is continued resilience in the economy bolstered by favourable economic reports.

Across the S&P500 sectors defensive sectors underperformed as the high beta sectors moved higher.

Best performing industries included diversified mining, steel & iron, food retail, oil & gas, silver.

In regards to the European energy crisis , across Europe as winter approaches energy rationing looks inevitable. Governments are spending billions to shield their countries from ballooning energy bills – with leaders fearing energy prices will get out of hand as temperatures drop.

In the UK, where annual household energy bills are expected to jump 80 per cent in October, newly minted Prime Minister Liz Truss is inheriting the energy crisis. On Thursday, she announced a plan to cap energy bills for two years, a move considered a larger economic intervention than any ever staged by the UK even during the early months of the Covid-19 crisis.

Whether or not she and other European leaders can get energy costs under control will determine if industries and citizens there -see rolling blackouts and a deep recession.

Currencies

$US Dollar was on the defensive Friday with the dollar index poised to snap a three-week winning streak in which it jumped more than 3.5 per cent. Dollar index was down 0.7 per cent with the greenback weaker on the major crosses.

One Australian dollar has strengthened compared to the US dollar on Friday, buying 68.35 US cents (Fri: 67.54 US cents), 58.80 Pence Sterling, 97.25 Yen and 67.73 Euro cents.

Bitcoin futures were up 10.3 per cent.

Commodities

Iron ore futures are pointing to a 3.7 per cent gain.

Gold gained $8.40 or 0.5 per cent to US$1729 an ounce.

Silver was up $0.33 or 1.8 per cent to US$18.77 an ounce.

Copper added $4.10 or 1.2 per cent to US$356.80 a pound.

Oil gained $3.25 or 3.9 per cent to US$86.79 a barrel.

Futures

The SPI futures are pointing to a 1.2 per cent gain.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris gained 1.4 per cent, Frankfurt added 1.4 per cent and London’s FTSE closed 1.2 per cent higher.

Asian markets closed higher. Tokyo’s Nikkei added 0.5 per cent, Hong Kong’s Hang Seng gained 2.7 per cent and China’s Shanghai Composite closed 0.8 per cent higher.

On Friday, the Australian sharemarket gained 0.7 per cent to 6894.

Ex-dividends

There are eleven companies set to trade without the right to a dividend.

Chorus (ASX:CNU) is paying 16.1043 cents unfranked
Dusk Group (ASX:DSK) is paying 10 cents fully franked
Duratec (ASX:DUR) is paying 1.5 cents fully franked
Diverger (ASX:DVR) is paying 3.5 cents fully franked
HUB24 (ASX:HUB) is paying 12.5 cents fully franked
Joyce Corporation (ASX:JYC) is paying 10.5 cents fully franked
L1 Long Short Fund (ASX:LSF) is paying 4.5 cents fully franked
MotorCycle Holdings (ASX:MTO) is paying 8 cents fully franked
Paragon Care (ASX:PGC) is paying 0.6 cents fully franked
Perseus Mining (ASX:PRU) is paying 1.64 cents unfranked
Saunders International (ASX:SND) is paying 2 cents fully franked

Dividends payable

There are five companies set to pay eligible shareholders today.

Credit Corp Group (ASX:CCP)
Computershare (ASX:CPU)
Cyclopharm (ASX:CYC)
Fiducian Group (ASX:FID)
Vicinity Centres (ASX:VCX)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network

Source: Finance News Network