Market Update & Important Indicators:
The Dow industrials and S&P 500 slipped Friday but notched gains for the week on stronger-than-expected earnings and fresh policy signals from the new U.S. administration. The Dow Jones Industrial Average ticked down 7.1 points, or less than 0.1%, to 20,094, while the S&P slipped 0.1% and the Nasdaq Composite rose 0.1%. All three indexes gained more than 1% for the week. Global stocks remain on track to end the week higher after the Dow industrials closed above the 20,000 mark for the first time ever and the S&P 500 and Nasdaq Composite both climbed to record highs. The VIX, considered Wall Street's "fear gauge," hit a more than two-year low this week as signs of an improving global economy and business-friendly policies in the U.S. have helped support risk appetite. Gross domestic product expanded at an inflation, and seasonally adjusted annual rate of 1.9% in the final three months of 2016, the Commerce Department said Friday. Economists surveyed by The Wall Street Journal had expected a 2.2% growth rate. In addition, demand for long-lasting manufactured goods declined in December.
European stocks fell from a 13-year high on Friday. The Stoxx Europe 600 index shed 0.3% to 366.38, trimming its weekly gain to 1.1%. European stocks caught upside momentum earlier this week as banking shares advanced and as a leap in U.S. stocks pushed the Dow Jones Industrial Average above 20,000 for the first time ever. The Stoxx Europe 600 Banks Index ended the week up 2.3%, its first weekly advance in three weeks.
Shares closed mostly higher cross Asia, supported by renewed investor risk appetite. The Nikkei Stock Average closed 0.3% higher. Bank stocks were among the day's winners, as the post-election increase in expectations around rising U.S. interest rates following President Donald Trump's surprise win boosted the so-called "Trump trade." Elsewhere, Hong Kong's Hang Seng Index ended down 0.1% after a half-day of trading as traders in the region left their desks to celebrate Lunar New Year festivities. China, Taiwan, South Korea and Vietnam were closed for the holiday.
Strong gains by banks helped drive Australian shares higher Friday as the market played catch-up with renewed risk-taking across the region. Australian markets were closed for a public holiday Thursday after the Dow Industrial Average ended above 20000 for the first time, joining records set by the S&P 500 and the Nasdaq Composite. The Dow added to its gains overnight. Ending at its high for the day, Australia's S&P/ASX 200 gained 42.5 points, or 0.8%, to 5714.0. That left it 1.1% higher for the week and its highest close since mid-January, after falling the last two weeks. The four largest banks collectively added 17 points to the ASX 200 on Friday, notching up a second straight session of gains as they resumed a post-U.S.-election rally that partially unwound in the past couple of weeks. Only the materials space was lower Friday, as gold stocks were knocked by a fall in price of the metal.
The London Metal Exchange's three-month copper contract closed up 0.7% to $5,899/t. The other base metals were mixed on Friday. Aluminium closed down 0.2% to $1,815/t, zinc closed down 0.4% to $2,742/t, tin closed down 0.2% to $19,897/t and lead closed down 0.7% to $2,313/t. Nickel prices bucked the trend rising 0.7% to $9,421/t.
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