Market wrap: Stop me if you've heard this one before. Shares look set to start the week much where they finished on Friday as global markets continue to search for a direction.
Our market looks like it wanted to rise last week, but the support just ain't there yet after stocks in the US ended mixed on Friday and the prices of most resources slipped. The Dow Jones and S&P 500 indexes wrapped up their fourth straight losing week with falls of 0.4%. Consumer confidence dropped and last week's news that the US Commodity Futures Trading Commission is considering trading limits on oil and other commodities continued to weigh on American miners.
Crude oil futures fell below $60 at the end of their sharpest weekly drop in six months. Futures dipped under $59 after the International Energy Agency report reaffirmed concerns about weak demand, but rebounded to end the week at $59.66, off less than 1%. Gold tracked sideways to $913. Base metals continued to retreat, with nickel, zinc and lead finishing near crucial support levels if their recent uptrends are to hold.
Futures traders expect our market to open marginally ahead. The SPI added 3 points to 3754. Frankly, that looks optimistic. The mining-heavy Canadian market lost 0.27% on Friday and our big two miners slipped in overseas trading.
TRADING THEMES THIS WEEK
RISING VOLATILITY? Crikey, I hope so - trading volumes here and overseas have been desperately low, but the US reporting season should provide some much-needed direction this week. There are quarterly profit reports due from Intel, Google, Goldman Sachs, Bank of America, Citigroup and JP Morgan. Any of those has the capacity to move the market.
TRANSPORT STOCKS: These are by no means day trades (okay, after six weeks of market drift I'm short on ideas), but for traders with a longer perspective the collapse in oil prices will start to feed through to the balance sheets of any company where fuel is a significant overhead. Like airlines - QAN, VBA, REX, AIZ - or perhaps companies such as TOL, TCL or AIO.
CASH: The short-term outlook for global markets remains clouded with a negative bias, so most of my money is on the sidelines at present. Let's hope the US reporting season offers some direction this week.
