Australian Stock Market Report
US durable goods orders fell by 1.0pct in June after a 0.8pct fall in May and 2.9pct rise in April. Economists had tipped a 1.0pct rise in orders.
The US Beige Book - a summary of economic conditions across Federal Reserve districts - said that economic activity continued to increase modestly in the past seven weeks. But most districts report that manufacturing has slowed or levelled off.
Reserve Bank NZ has lifted the cash rate 25bp to 3pct.
European shares fell for the first time in seven days with the FTSEurofirst index down by 0.3pct, while the UK FTSE fell by 0.9pct and the German Dax lost 0.5pct. A softer reading on US durable goods orders weighed on sentiment while shares in ArcelorMittal lost 2.1pct after it said that profits could suffer from a slowing Chinese economy.
The blue-chip US Dow Jones index fell for the first time in five days in response to softer-than-expected economic data. But corporate earnings generally remained positive - 49pct of S&P 500 companies have reported earnings and 77pct have beaten expectations. The Dow Jones fell by almost 40 points or 0.4pct with the S&P 500 lower by 0.7pct, and the Nasdaq lost 23 points or 1.0pct.
US treasuries rose on Wednesday (yields lower) as traders trimmed positions in equities and commodity markets, favouring bonds. Soft economic data was the catalyst for the moves. US 2yr yields fell by 3pts to 0.61pct and US 10yr yields eased by 5pts to near 3.00pct.
Major currencies were mixed against the greenback in European and US trade on Wednesday. The Euro held between US$1.2970 and US$1.3040, before ending US trade at US$1.2995. The Aussie dollar eased from highs around US89.70c to US89.05c, ending US trade near US89.30c. And the Japanese yen strengthened from near 88.10 yen per US dollar to JPY87.30, ending US trade near JPY87.45.
US crude oil prices fell for a second day in response to downbeat economic data and a surprise lift in crude oil stocks. The Nymex crude oil contract fell by US51c or 0.7pct to US$76.99 a barrel while London Brent crude fell by US7c to US$76.06 a barrel.
Base metal prices were generally higher by between 0.7-2.4pct on the London Metal Exchange on Wednesday, except nickel which lost 0.7pct. Investors have retained their upbeat assessment of economic and corporate news. And the Comex gold price rose for the first time in four days on a slight pick-up in safe-haven buying. Comex gold rose by US$2.40 an ounce to US$1,160.40. Gold has lifted to US$1,163.50 in after hours trade.
Ahead: In Australia, new home sales data is released. Austar Communications releases earnings results. In the US weekly jobless claims data is released.
Craig James
Newsletter: To receive this article daily and related articles, sign up here