Australian Stock Market Report 06/03/2011
US factory orders fell by 1.2pct in April, broadly in line with economist forecasts. US claims for unemployment insurance (jobless claims) fell by 6,000 in the latest week to 422,000. Economists expected a result near 415,000. US comparable chain store sales were up 5.4pct on a year ago in May according to the International Council of Shopping Centres. And productivity growth was revised up from 1.6pct to 1.8pct in the March quarter.
Moody´s Investor Services said it would place the credit rating of the US on review for a downgrade if the debt limit is not increased.
European shares slumped for a second day on Thursday on continued concerns about the health of the US economy. And mining stocks fell sharply with BHP Billiton down 2.7pct in London trade with Rio Tinto down 2.6pct. The FTSEurofirst index fell by 1.3pct with the German Dax down by 2.0pct and the UK FTSE fell by 1.4pct.
US sharemarkets finished mixed in choppy trade on Thursday as investors prepared for the release of key employment data on Friday morning. The Dow Jones fell by 41pts or 0.3pct with the S&P 500 down by 0.1pct but the Nasdaq finished higher by 4pts or 0.1pct.
US treasury prices fell on Thursday (yields higher) as investors sought to square positions ahead of pivotal job data out on Friday. Investors also reacted to Moody´s threat on the US sovereign credit rating. US 2yr yields rose by 3pts to 0.465pct and US 10yr yields rose by 9pts to 3.037pct.
The US dollar lost ground in late trade against the Euro and commodity currencies but was higher against the Japanese yen in choppy trade. The Euro rose from lows of US$1.4365 to near US$1.4510, ending US trade near US$1.4495. The Aussie dollar rose from lows near US106.00c to US106.85c, ending US trade near US106.80c. And the Japanese yen eased from 80.60 yen per US dollar to near JPY81.00, before ending US trade near JPY80.95.
Crude oil prices rose on Thursday as investors weighed up news on the US economy, Moody´s credit rating warning and hopes of new financial aid for Greece. The Nymex crude oil contract rose by US11c to US$100.40 a barrel and London Brent crude rose by US$1.01 a barrel to US$115.54.
Base metal prices slumped on the London Metal Exchange on Thursday as investors fretted about the health of the global economy. Metals fell 1.7-4.1pct with lead faring the worst and zinc down the least. And the gold price eased in line with other commodities despite a softer greenback with Comex gold futures down by US$10.50 an ounce to US$1,532.70.
Ahead: In Australia, tourist arrivals/departures and alcohol consumption data are released. In the US, the ISM services gauge and non-farm payrolls data are released.