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 out from six major banks, the June consumer price index due for release, US inflation, central bank rate rises and perhaps better commodity prices.

That was after one of the better weeks in a while for markets, even though commodities were softer again.

The Nasdaq gained 0.12% to settle at 11,635.31, while the S&P 500 dipped 0.08% to 3,899.38. The Dow closed down 46.40 points, or 0.15%, at 31,338.15.

The Nasdaq has risen in five straight 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 in market forecasts.

That continued what has been a strong year for job growth in America and will make it easier for the Federal Reserve’s to again lift rates by 0.75% at its next meeting on July 26 and 27.

Eurozone shares rose 0.8% on Friday and the US S&P 500 eased and ASX 200 futures rose 20 points, or 0.3%, meaning a positive start to trade for the Australian share market this morning.

Besides the rise in US shares last week, Eurozone shares rose 1.7%, Japanese shares gained 2.2% but Chinese shares fell 0.8%.

Australian shares followed the US lead with a 2.1% gain, one of the strongest this year, led by IT, consumer discretionary, health and property stocks.

Bond yields generally rose except in Australia. US 10-year yield rose 8 points on Friday and 19 points over the week to end at 3.08%.

Oil, metal (especially copper) and iron ore prices fell.

The $A rose slightly despite a further rise in the $US.

The Aussie dollar rose half a cent over the week to end at 68.62 after dipping below 68 cents during the week.

The US jobs result for June was a case, as one US analyst put it ‘good news being bad’ for the markets because it means another big rise 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 Michael Arone of State Street Global Advisors. “Wages were growing but at a slower rate. …That was a good thing, and yet the markets kind of shrugged their shoulders here because at the end, the conclusion is the Fed is going to go by 75 basis points.”.

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