Australian Stock Market Report – Afternoon 9/12/13

AFTERNOON REPORT
(5pm AEST)

The All Ordinaries Index (XAO) edged higher by 0.2 per cent; pulling back from the 5250pt level flirted with earlier in the session. This makes it not only five straight days of gains but also the best winning streak for Australian shares in two months.

Just before lunch, the much anticipated jobs report was issued. The unemployment rate rose to a fresh four year high with 10,800 jobs lost in August. 2600 full time positions were lost while part time jobs fell by 8100. The Australian dollar dropped by around US1c against the greenback following the result to US92.4c while the equities market held up well in the afternoon.

Keep in mind that this is a backward looking indicator. Over the past week, we've had promising readings for both consumer and business confidence thanks to the Federal Election. The question remains if confidence can be sustained over the next few months or if it will retreat after the initial improvement. Should confidence rise further, this could boost spending, business investment and ultimately a pick-up in hiring.

Australia's biggest department store owner, Myer (MYR) reported an 8.7 per cent slump in full year profit to $127.2 million. Sales rose a touch to $3.14 and an $0.08 final dividend was declared. The dividend will be paid to eligible shareholders on 14 November. Cost pressures, a somewhat conservative consumer and a warm winter have all played their parts in holding back profit. Better consumer confidence levels 'could' improve sales at the retail level.

Over the past five days, solid Chinese economic data and the reduced likelihood of a military strike on Syria (for now) has helped markets. The miners have been amongst the most obvious beneficiaries, with BHP Billiton (BHP) up 0.69 per cent today and over 4 per cent this week. Rio Tinto (RIO) edged higher by 0.08 per cent.

European stocks hit 3.5 year highs overnight and US shares (S&P500 index) have now improved for seven straight trading sessions. In Europe tonight, industrial production (factory activity) will be issued together with both Italian and British bond auctions. In the US, import and export prices for August together with the monthly federal budget data and jobless claims will be released

[Kick off your trading day with our newsletter]