Australian Stock Market Report – Morning 4/24/14

MORNING REPORT
(7am AEST)

In US economic data, new home sales fell by 14.5% to a 384,000 annual rate in March, an 8-month low and below the market expectation for a result near 450,000. The Markit manufacturing index eased from 55.5 to 55.4 in April, below forecasts for a result near 56.0.

European shares fell on Wednesday, dragged down by poor earnings results in the tech sector. The FTSEurofirst 300 index fell by 0.6%, with the German Dax also down 0.6% while the UK FTSE lost just 0.1%. The STOXX Europe 600 technology index fell by 1.4%. Mining shares were mixed in London trade with shares in BHP Billiton up by 0.1% while shares in Rio Tinto fell by 0.2%.

US sharemarkets were lower on Wednesday with weakness mainly confined to the telecom and biotechnology sector. Weaker-than-expected economic data weighed on investor confidence. Earnings results were mixed. The Dow Jones index fell by almost 13 points or 0.1% after holding in a 48 point range. The S&P 500 fell by 0.2% while the Nasdaq fell for the first day in seven, down by 34.5 points or 0.8%. After the bell shares in Facebook rose by 2.8% after releasing earnings.

US long-term treasury prices rose on Wednesday (yields lower) as economic data printed below market forecasts. But shorter-term treasury yields rose. US Treasury sold $35 billion in five-year notes on Wednesday and will sell $29 billion in seven-year notes on Thursday.US 2 year yields rose by 3pts to 0.44% while US 10 year yields fell by 3pts to 2.688%.

Major currencies again ended European and US trade little changed against the greenback compared with the Asian close. The Euro held between US$1.3800 and US$1.3855, before ending US trade around US$1.3815. The Aussie dollar held between US92.65c and US92.90c before finishing US trade around US92.85c. And the Japanese yen held between 102.17 yen per US dollar and JPY102.62 and was near JPY102.48 at the US close.

World oil prices fell again on Wednesday after data revealed that US crude oil inventories hit record highs last week. US crude stocks rose by 3.5 million barrels to 397.6mb, the highest levels since records began in 1982. Brent crude fell by US16c or 0.1% to US$109.11 a barrel while US Nymex fell by US31c or 0.3% to US$101.44 a barrel.

Base metal prices were mixed on the London Metal Exchange on Wednesday with gains or losses not exceeding 1.0%. Zinc fell 1.0% but tin and nickel rose by 0.4% and 0.3% respectively. The Comex gold futures quote rose for the first time in four sessions, up by US$3.50 an ounce or 0.3% to US$1,284.60 per ounce. Iron ore fell by US30c to US$112.20 a tonne on Wednesday.

Ahead: In Australia no major economic data is published. In the US, data on weekly claims for unemployment insurance is released with durable goods orders and the Kansas City Federal Reserve survey.

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