Weekly Market Summary

by Raymond Chatlani

On Monday, Asian stockmarkets were sharply lower amid signs of U.S. economic sluggishness and escalating worries about Europe's debt crisis after Italy and Greece were slapped with credit downgrades. In Europe, Standard & Poors cut its ratings outlook for Italy's debt from stable to negative Saturday, citing the country's poor growth prospects and concerns about the government's ability to reduce public borrowing. But with its rating still A+, Italy remains in far better shape than Greece. European mining and airline shares fell on renewed worries over the Eurozone debt crisis and as an eruption by Iceland's most active volcano was set to keep the island's main airport shut on Monday, while other European nations watched for any disruption to their air routes from a towering plume of smoke and ash. US markets joined the global sell-off on european debt worries.

On Tuesday, Asian stockmarkets closed mixed and flat amid eurozone worries. European markets rose on strong German business sentiment which was above expectations. US stocks ended the day with modest losses with weakness on tech stocks while oil stocks gained.

On Wednesday, Asian stockmarkets fell with Asian investors spooked by concerns over valuations and the outlook for commodities. European markets fell at the start of trading but closed the day higher on a turnaround in Wall Street. US indexes rose as commodities gained.

On Thursday, Asian stocks rose led by commodity and consumer related sectors, with steadier commodity markets and the euro's rally above $1.41 bringing some investors back into the markets in search of bargains. The risks surrounding the euro have not eased much, with Greece fighting to avoid a debt restructuring that could have a big ripple effect across other high risk-European countries struggling with gaping fiscal deficits. European stockmarkets fell as a result of disappointing economic news from the US and the ongoing troubles in Greece. US markets rose on upbeat corporate earnings although two disappointing economic reports revealed a weak U.S. jobs market and sluggish overall economic growth. US GDP grew at a sluggish 1.8 percent in the January-March quarter and more people applied for unemployment benefits last week. The number of people seeking benefits rose by 10,000 to 424,000, more than analysts were expecting.

On Friday, Asian stockmarkets rose for a second day after leaders of the Group of Eight said the global economy is gaining strength and South Korea’s current-account surplus widened. European markets rose across the board, with banks leading the advance after Citigroup turned bullish on the sector. Wall street rose as bullish comments about Greece caused the dollar to fall against the Euro, resulting in strength in commodity prices.

Last week, global equities and commodities recovered slightly, though Europe fell after Italy and Greece were slapped with credit downgrades. The U.S. dollar fell broadly on Friday after weaker-than-expected U.S. consumer spending and housing data stoked worries the recovery is losing momentum, while commodities posted a third straight week of gains. Friday's data showed high gasoline prices crimped U.S. consumer spending and bad weather pushed pending home sales to a seven-month low in April.

Today, trading is expected to be thin due to holidays in the U.S. and the UK. Although markets had a positive week, signs of a less than robust recovery in the US economy together with worries that Greece may not be able to avoid a default may hold this market within a range throughout the summer