Australian Stock Market Report - Morning 01/27/2012
US durables orders rose by larger than expected 3pct in December. Durables orders excluding defence and aircraft orders - a close proxy for business spending - rose by 2.9pct.
US initial jobless claims rose by 21k to 377k last week. But the underlying trend remains lower with the four week average of claims falling by 2,500 to 377,500. New home sales fell by 2.2pct to 307k unit annual rate. The median price for a new home fell 2.5pct to $210,300 - the biggest drop in four months.
European shares rallied to six month highs on Thursday with cyclical stocks leading the gains. The STOXX Europe 600 Basic Resources Index rose by 3.3pct. Greek banks also received a boost on speculation that a bond swap scheme to lighten the country´s debt burden would be successful. The Greek banking index gained 19pct. The FTSEurofirst index rose by 1.2pct, with the UK FTSE rose 1.3pct and German Dax 1.8pct.
US sharemarkets gave back early gains on Thursday as the weaker than expected housing data gave investors a reason to lock in recent profits. However losses were minimal given the Fed commitment to keep interest rates near zero until at least the end of 2014. The PHLX housing sector index fell 1.1pct. The KBW banking index lost 2.2pct. AT&T fell 2.5pct after posting a $6.6billion quarterly loss on a break-up fee for its failed T-Mobile USA merger. At the close of trade, the Dow Jones was down by 22 points or 0.2pct with the S&P 500 down 0.6pct and the Nasdaq lost 13pts or 0.5pct.
US treasuries rallied on Thursday (yields lower) as traders continued to react to the dovish signal from the Federal Reserve. US 2yr yields fell 1pt to 0.215pct and US 10yr yields fell 6pts to 1.938pct
The Euro and commodity currencies rallied US dollar in the European session before easing in the US session. The Euro hit early highs near US$1.3180 before falling to lows near US$1.3090 and was near US$1.3105 in late US trade. The Aussie dollar rallied from lows near US106.10c to US106.90c, but eased back to US106.20c in late US trade. And the Japanese yen strengthened from 77.70 yen per US dollar to JPY77.30 and was near JPY77.40 in late US trade.
US oil prices gave back early gains on Thursday as the US dollar recouped some of its losses. The mixed set of US economic data also added to the more cautious tone. Nymex oil rose by US30c or 0.3pct to US$99.70 a barrel and London Brent crude rose by US$1.09 to US$110.90 a barrel.
Base metals rallied on Thursday as investors cheered news that the US Fed was ready to offer additional stimulus. Copper rose 2.5pct to a four-month high while Tin surged by 7pct. And the gold price rallied to a seven week high on Thursday with the Comex February gold price up by US$26.60 or 1.6pct to US$1,726.60 an ounce.
Ahead: In Australia, no economic data is released. In the US, fourth quarter GDP and Consumer confidence figures are released.