Australian Stock Market Report – Morning 4/30/14

MORNING REPORT
(6.00am AEST)

In US economic data, the Redbook chain store sales index was up 3.8% on a year ago, compared with a 3.7% annual gain in the previous week. Consumer confidence fell from 83.9 to 82.3 in April, short of forecasts near 83.0. And the CaseShiller home price index rose 0.8% in February to stand 12.9% on a year ago.

European shares rose on Tuesday in response to positive earnings results by technology companies. The FTSEurofirst 300 index rose by 1.2%, with the German Dax up by 1.5% while the UK FTSE rose by 1.0%. And mining shares shared in the gains in London trade with shares in BHP Billiton up by 0.8% while shares in Rio Tinto lifted 1.1%.

US sharemarkets rose on Tuesday as investors digested earnings news. Shares in Merck rose by 3.6% in response to its earnings result but shares in luxury goods company Coach lost 9.3% in response to weaker North American sales. The Dow Jones index rose by 86 points or 0.5%, getting within 30 points of its record high. The S&P 500 was up by 0.5% and the Nasdaq lifted by 29 points or 0.7%. Shares in Twitter fell by 8.1% after the bell in response to its earnings result after being up 4.6% in Tuesday´s session.

US long-term treasury prices were little changed on Tuesday ahead of the Federal Reserve monetary policy decision. While economic data was mixed, shares rose to near record highs, reducing interest in government bonds. US 2 year yields were flat at 0.442% while US 10 year yields fell by 1 point to 2.69%.

Major currencies were mixed against the US dollar over the European and US sessions on Tuesday. The Euro fell from highs near US$1.3875 to lows near US$1.3805, before ending US trade around US$1.3810. The Aussie dollar rose from lows near US92.35c to around US92.80c before finishing US trade around US92.70c. And the Japanese yen held between near 102.45 yen per US dollar and JPY102.77 before ending US trade near JPY102.58.

World oil prices rose on Tuesday as investors responded to geopolitical concerns and the potential for supply disruptions. In Libya, Reuters reported that ´´gunmen stormed Libya´s parliament, wounding several people, while a suicide bomber in a car killed at least two people and wounded two others at an army camp in the eastern city of Benghazi.´´. Brent crude rose by US86c or 0.8% to US$108.98 a barrel while US Nymex rose by US44c or 0.4% to US$101.28 a barrel.

Base metal prices fell by up to 1.8% on the London Metal Exchange on Tuesday with tin and lead falling the most while nickel eased only 0.1%. The Comex gold futures quote fell by just US$2.70 an ounce or 0.2% on Tuesday to US$1,296.30 per ounce. Iron ore fell by US30c a tonne to US$108.30 a tonne on Monday.

Ahead: In Australia private sector credit figures are released. In the US, the Federal Reserve hands down the monetary policy decision. The ADP employment report is released together with GDP (economic growth), the Chicago purchasing managers index and the employment costs report.

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