In US economic data, retail sales rose by 0.3% in October (forecast +0.2%). Excluding autos, sales rose by 0.2% (forecast +0.4%). Export prices fell 0.1% in October as expected but import prices fell by 0.5% (forecast -0.2%). Industrial production fell by 0.8% in October (forecast -0.4%). The Empire State manufacturing index eased from +4 points to +2.9 points in November (forecast +5 points). Business inventories were unchanged in September.
US share markets rose to record highs on Friday. US Commerce Secretary Wilbur Ross said in an interview on Fox Business Network that there was a very high probability the United States would reach a final agreement on a phase one trade deal with China. Shares in Applied Materials rose 9% after the chip gear maker forecast first quarter revenue above market expectations. At the close the Dow Jones was up by 223 points or 0.8%. The S&P500 index was up by 0.8% and the Nasdaq index was higher by 62 points or 0.7%. Over the week the Dow rose by 1.2%, the S&P 500 rose by 0.9% and the Nasdaq rose by 0.8%.
US treasuries were weaker on Friday (yields higher) as investors favoured equities and commodities over 'safe-haven' bonds and gold. US 2-year yields rose by 2 points to near 1.614% and US 10- year yields rose by 2 points to near 1.833%. Over the week US 2- year yields rose by 5 points and US 10-year yields fell by 10 points.
European share markets rose on Friday for the sixth straight week on hopes for a US-China trade deal. The pan-European STOXX600 index rose by 0.4%. The German Dax index rose by 0.5%. The UK FTSE index rose by 0.1%. In London trade shares of Rio Tinto rose by 1.5% and BHP shares rose by 0.9%.
Major currencies were mixed against the US dollar in European and US trade. The Euro rose from lows near US$1.1015 to highs near US$1.1055 and was around US$1.1050 in afternoon US trade. The Aussie dollar rose from lows near US67.80 cents to highs near US68.25 cents and was near the highs in afternoon US trade. The Japanese yen eased from 108.28 yen per US dollar to JPY108.85 and was around JPY108.77 in afternoon US trade.
Global oil prices rose by near 1.7% on Friday on optimism about a US-China trade deal. But prices were capped by the International Energy Agency monthly report that predicted a lift in non-OPEC oil supplies in 2020. Brent crude rose by US$1.02 or 1.6% to US$63.30 a barrel. And the US Nymex price rose by US95 cents or 1.7% to US$57.72 a barrel. Over the week Brent rose by 1.3% and Nymex rose by 0.8%.
Base metal prices fell by 0.7-1.3% on the London Metal Exchange on Friday with tin down the least and lead down the most. But copper rose by 0.7% and aluminium rose by 1.2%. Over the week metals fell by 1.4-7.5% with copper down the least and nickel down the most.
The gold futures price fell by US$4.90 or 0.3% to US$1,468.50 an ounce. Spot gold was trading near US$1,467 an ounce in late US trade. Over the week gold rose by US$5.60 or 0.4% Iron ore rose by US$1.35 or 1.6% to US$84.75 a tonne. Over the week iron ore rose by US$4.85 or 6.1%.
In Australia, the Reserve Bank Governor gives 'off the record' comments to the Trans Tasman Business Circle. In China, foreign direct investment figures are released. In the US, the NAHB housing market index is released with capital flows data.
If you liked this article you'll love the Switzer Report, our newsletter and website for trustees of self-managed super funds. Click here for a FREE trial and to hear more of Peter’s expert commentary and advice.