Australian Stock Market Report – Morning 11/11/13

MORNING MARKET UPDATE
(5.05am AEDT)

In US economic news, non-farm payrolls (employment) rose by 204,000 in October, well ahead of forecasts tipping a 125,000 gain. Jobs were revised up by 60,000 in the two previous months. The unemployment rate rose from 7.2pct to 7.3pct.

In other US economic news consumer sentiment fell from 73.2 to 72.0 in November and below forecasts for a result near 74.5. Personal income rose 0.5pct in September and spending rose 0.2pct.

In Chinese economic news, retail sales rose 13.3pct over the year to October with production up 10.3pct and consumer prices up 3.2pct - all generally in line with forecasts.

The US Dow Jones share index finished with a flourish to end at the day´s highs and record highs on Friday. While stocks dipped slightly at the open on fears that the Federal Reserve could wind back stimulus, eventually investors took a more positive view of the jobs data. Shares in Twitter fell by 7.2pct on its second day of trade. The Dow Jones rose by almost 168 points or 1.1pct with the S&P 500 up by 1.3pct and the Nasdaq was higher by 62pts or 1.6pct. Over the week the Dow rose 0.9pct, S&P 500 rose 0.5pct while the Nasdaq lost 0.1pct.

US treasuries slumped on Friday (yields higher) in response to better-than-expected jobs data. US 2yr yields rose by 2pts to 0.314pct and US 10yr yields rose by 15pts to 2.75pct. Over the week US 2yr yields were steady and US 10yr yields rose by 14pts.

Major currencies fell against the greenback in European and US trade on Friday in response to better-than-expected US jobs data. The Euro fell from highs near US$1.3435 to around US$1.3315, ending US trade near US$1.3370. The Aussie dollar fell from highs near US94.75c to US93.50c, ending US trade near US93.85c. And the Japanese yen eased from near 97.94 yen per US dollar to JPY99.20, ending US trade at JPY99.07.

World oil prices rose on Friday in response to solid US economic data and encouraging Chinese trade figures. While talks between Iran and western nations over the former´s nuclear program stalled over the weekend, parties are still hopeful of success. The Brent crude price recovered from a four-month low and ended higher by US$1.66 or 1.6pct to US$105.12 a barrel, US Nymex crude rose by US40c or 0.4pct to US$94.60 a barrel. Over the week Brent fell by 0.7pct and Nymex crude was flat.

Base metal prices were mixed on the London Metal Exchange on Friday. Tin, zinc and copper rose up to 0.7pct and other metals fell up to 0.6pct. Metals fell up to 4.6pct over the week but tin rose 0.2pct. Gold fell in heavy trade on Friday as the greenback rose with the Comex December futures gold price down by US$23.90 or 1.8pct to US$1,284.60 per ounce. Gold fell 2.2pct over the week. The iron ore price fell by US$1.00 a tonne or 0.7pct on Friday to US$135.90 a tonne. Iron ore rose 60c over the week.

Ahead: In Australia, housing finance data is released. In the US, Veterans Day is observed but the sharemarket is open.

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