Australian Stock Market Report – Morning 12/9/13

US MORNING REPORT
(5.10am AEDT)

In US economic news, employment (non-farm payrolls) rose by 203,000 in November, ahead of forecasts for a gain of 180,000. The unemployment rate fell from 7.3% to a five-year low of 7.0%. Meanwhile personal income fell 0.1% in October while spending rose 0.3%. And consumer sentiment rose from 75.1 to 82.5 in December.

In Chinese economic news, exports rose by 12.7% in the year to November with imports up 5.3%. The trade surplus expanded from US$31.3 billion to US$33.8 billion.

European shares rose on Friday with investors encouraged by solid US economic data. Shares in market heavyweight Nestle rose 1.1% after indicating that will sell a 10% stake in subsidiary, Givaudan. The FTSEurofirst 300 index rose by 0.7%, on Friday, ending the longest losing streak in six months. The German Dax rose by 1.0% and the UK FTSE gained 0.8%. In UK trade, shares in BHP Billiton rose by 1.6% while Rio Tinto gained 1.1%.

US sharemarkets rose on Friday. Investors chose to focus on the positives of stronger economic data for revenues and profits rather than the negatives, that is, that the Federal Reserve may start to wind back stimulus. The Dow Jones rose by 198 points or 1.3%, with the S&P 500 up by 1.1% while the Nasdaq lifted 29pts or 0.7%. Over the week the Dow Jones index fell 0.1%, the S&P 500 index lost less than 0.1% but the Nasdaq rose 0.1%.

US long-dated treasuries rose on Friday (yields lower) as bargain hunters waded in, prompting a short squeeze. US 2yr yields were flat at 0.305% while US 10yr yields fell by 2pts to 2.86% after earlier hitting 2.93%. Over the week US 2yr yields rose by 2pts and US 10yr yields rose by 6pts.

The US dollar fell against the Euro and commodity currencies in European and US trade on Friday. The Euro lifted from lows near US$1.3630 to US$1.3705, ending New York trade near the day´s highs. The Aussie dollar lifted from lows near US89.92c to US91.20c, and closed US trade at US91.00c. And the Japanese yen eased from 102.00 yen per US dollar to JPY102.97 and ended US trade near JPY102.89.

World oil prices rose on Friday with investors hopeful that firmer US economic data will translate to stronger demand for oil. Brent crude rose by US63c or 0.6% to US$111.61 a barrel while US Nymex crude rose by US27c or 0.3% to US$97.65 a barrel. Over the week Brent rose by 1.8% while Nymex lifted 5.3%.

Base metal prices rose up to 1.2% on the London Metal Exchange on Friday with aluminium leading the way while nickel rose only 0.1%. Over the week metals rose between 0.6-1.9% with nickel doing best. The Comex gold futures price fell by US$2.90 or 0.2% on Friday to US$1229.00 per ounce. Over the week gold fell by $21.40 or 1.7%. The iron ore price fell 30c on Friday to US$139.20 a tonne but rose by US$2.80 over the week.

Ahead: In Australia, the ANZ job ads series is released. In China, data on producer and consumer prices is released. In the US, the employment index is issued.

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