Beastly Session As Bondcano Rumbles

Originally published by CMC Markets

The world’s most famous index – the Dow Jones Industrial Average, shed 666 points (-2.5%) on Friday night in a session marred by fears of a bond market meltdown. Stronger job numbers and wage growth lit the match, largely reversing recent market moves. The US dollar strengthened, shares and commodities tumbled and US 10-year bond yields hit a four year high

European investors suffered as well in the cross asset class sell-off. The euro and British pound weakened. The German DAX mirrored moves tin the US S&P 500 and both major indices shed 4% or thereabouts over the week. A similar performance this week would put both globally important markets close to the technical definition of a market correction.

The ructions in equities occurred despite generally upbeat company earnings reports in the USA and Japan. While consumer groups like Estee Lauder (NYSE:EL) beat forecasts, weaker reports from oil giants Exxon (NYSE:XOM) and Chevron (NYSE:CVX) added to the gloom on Friday night.

The Australian reporting season gets underway this week. Important results include Commonwealth Bank Of Australia (AX:CBA), National Australia Bank (AX:NAB), Macquarie Group s(AX:MQG), Rio Tinto (LON:RIO), Mirvac Group (AX:MGR) and Tabcorp Holdings (AX:TAH). The mid-session release today of Chin Caixin PMIs could be influential, and Australian investors will look to tomorrow’s retail sales data for a guide to the status of the previously missing-in-action consumer.