Australian Stock Market Report
The US National Homebuilders Association housing sentiment index eased from +16 to a 15-month low of +14 in July.
US companies continue to meet market expectations with bottom-line earnings: Delta Airlines 65c a share (63c consensus); Halliburton 52c (37c); Hasbro 29c (24c).
Moody´s cut Ireland´s credit rating one notch from Aa1 to Aa2 with a stable outlook. Some analysts had expected a more severe downgrade.
European shares fell for a fourth day on Monday with jitters about upcoming bank stress test results, weak US housing sentiment and European sovereign debt issues weighing on investor sentiment. The FTSEurofirst index fell by 0.7pct with the UK FTSE down 0.2pct and German Dax lost 0.5pct.
US sharemarkets rose on Monday, underpinned by optimism about coming technology earnings and stronger orders for Boeing. The Dow Jones rose by 56 points or 0.6pct with the S&P 500 up 0.6pct, and the Nasdaq lifted 19 points or 0.9pct. After the bell IBM beat consensus estimates on earnings but fell short on revenue.
US longer-term treasuries fell on Monday (yields higher) as a rebound on the sharemarket offset weak news on the US housing market. US 2yr yields were steady near 0.59pct and US 10yr yields rose 4pts to 2.96pct. Analysts are awaiting testimony by Federal Reserve chairman Ben Bernanke on Wednesday.
Major currencies charted their own directions against the US dollar on Monday. The Euro rose from around US$1.2870 to US$1.2985 in early European trade after Moody´s downgrade of Irish debt was better than expectations. The Euro eased over the US session to end US trade at US$1.2945. The Aussie dollar held between US86.55c and US87.20c, ending the US session near US86.80c. And the Japanese yen eased from 86.55 yen per US dollar to JPY87.20 over the European session, but lifted in US trade to end near JPY86.70.
US crude oil prices rose for the first time in four days as investor demand for growth-dependent equities and commodities showed signs of improving. The Nymex crude oil contract rose by US53c or 0.7pct to US$76.54. And London Brent crude rose by US13c to US$75.50 a barrel.
Base metal prices were mixed on the London Metal Exchange on Monday, as investors weighed conflicting signals. Zinc rose 0.6pct, copper rose 0.4pct and lead lifted 0.2pct but aluminium lost 0.5pct and nickel lost 0.8pct. And the Comex gold price fell for a second day, down by US$6.30 an ounce to US$1,181.90. Range was from US$1,176.90 to US$1,194.70
Ahead: In Australia, minutes from the July 6 RBA Board meeting are released. The Reserve Bank Governor delivers a speech. In the US, housing starts data is released.
Newsletter: To receive this article daily and related articles, sign up here