Respite on Friday night our time for the markets with an easing of the sell off of the preceding four days, thanks to a better than expected jobs report for the US for April.
But a late rumour (denied) that Greece was looking to leave the euro, and then confirmation of a meeting of senior European finance ministers to discuss Greece’s financial position, saw markets sell off late in the day.
Greek government officials on Saturday confirmed a meeting with other eurozone ministers, but denied the talks were about the country keeping the single currency.
Press reports had suggested that the meeting of eurozone finance ministers was in part sparked by fears of Greece’s possible departure from the euro. But a statement by the Greek Ministry of Finance said this wasn’t the case.
“This meeting was in the context of wider talks between the ministers of finance of euro zone countries that participate in the G-20,” said the Ministry.
“The Greek minister of finance was asked to participate for an exchange of views regarding economic developments in Greece,” the statement said, according to Marketwatch.
Yesterday European officials confirmed that Greece’s financial position would be exmined this week with a view to changing its bailout package and terms because they now realised the country won’t be able to re-enter borrowing markets next year as originally planned.
This will undoubtedly see Greece given more aid from an international agency, such as the IMF.
As a result of the worries about Greece, investors went to the first normal weekend in a couple of weeks with a worry or two in their minds and the buoyancy caused by the jobs report (it sent the Dow up 175 points at one stage, before it ended up 55 points) had been overtaken.
But let’s not deny the fact that the jobs report (and revisions to previous months) was good news for the US economy.
A bigger than expected 244,000 jobs were added in April, but the unemployment rate rose to 9% from 8.8% in March.
The forecast had been for 185,000 nonfarm jobs were created in April.
The private sector added 268,000 jobs, sharply higher than the 200,000 expected, but thousands of local jobs were again lost.
Payrolls for February and March were also revised up by a combined 46,000, the Labor Department reported Friday.
March’s figure is now 221,000 new jobs.
US companies have added three-quarters of a million jobs so far in 2011 and 1.3 million over the past year.
But the US economy has nearly 7 million fewer employed workers now than it did before the recession.
But some analysts cautioned that the jobs survey was done before the sharp rise in unemployment benefit claims appeared in the weekly figures.
But the figures eased the doubts the rise in the weekly benefits had created.
The price on the benchmark 10-year US Treasury bonds rose Friday, pushing the yield down to 3.16%, and another low for the year so far.
It was 4th week in a row that US treasury bond yields have fallen.
The jobs report had no immediate impact on sentiment in this market.
The Dow ended up 0.4%, to 12,639. The Standard &Poor’s 500 rose 5 points, or 0.4%, to 1,340 and the Nasdaq Composite added 13 points, or 0.5%, to end the week at 2,828.
For the week the Dow industrials fell 1.3%, the S&P 500 fell 1.7%, and the Nasdaq Composite lost 1.6%, thanks to the sell-off in commodities, especially silver, gold, oil and copper.
The reports about Greece hit the euro and the currency lost around 1% against the greenback on Friday.
Australian shares will open slightly higher today after the gains on Wall Street.
The SPI futures were up 10 points to 4753 on Saturday morning.
At Friday’s close, the ASX 200 ended down 10.7 points, or 0.2%, at 4743, leading to a weekly loss of 1.7%, after the 1.8% fall the week before.
The All Ordinaries index fell 12.8 points on Friday, or 0.3%, to 4816.1.
The Australian dollar ended at 107 USc, up a touch after the falls earlier in the week from its 29-year peak of 110.12 USc reached on Monday.
Monday morning the Aussie was trading around $US1.0715, up slightly on the weekend close.
At the close, the benchmark ASX200 index was down 10.7 points, or 0.2%, at 4743, leading to a weekly loss of 1.7%, after last week’s 1.8% decline.
The All Ordinaries index fell 12.8 points today, or 0.3%t, to 4816.1.
European markets closed solidly higher on Friday, following the US jobs report.
Britain’s FTSE 100 ticked up 1%, the DAX in Germany added 1.6% and France’s CAC 40 rose 1.3%.
The Stoxx Europe 600 Index dropped 0.9% over the week to cut its 2011 gain to just 2%.
London lost 1.5% and German’s DAX was off 0.3% after Friday’s big rise.
Asian markets ended lower.
The Shanghai Composite shaved 0.3%, the Hang Seng in Hong Kong lost 0.4% and Japan’s Nikkei tumbled 1.5%.
Hong Kong’s Hang Seng Index fell 0.4% to 23,159.14 for an eighth successive session, China’s Shanghai Composite dropped 0.3% to 2,863.89 and Taiwan’s Taiex shed 0.5% to 8,977.23.
Big losses were suffered by Japanese and South Korean stocks as those markets reopened after holidays, with the Nikkei Stock Average falling 1.5% to 9,859.20 in Tokyo and the Kospi losing 1.5% to 2,147.45 in Seoul.
India’s rose 1.4% to 18,469.54 in afternoon trade after a record nine-session losing streak.
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