Australian Stock Market Report – Morning December 24, 2014

Trader Peter Tuchman wears a "Dow 18,000" cap as he works on the floor of the New York Stock Exchange in New York, December 23, 2014. U.S. stocks advanced on Tuesday, as the Dow climbed above the 18,000 mark for the first time in history and the S&P 500 set a new intraday record after an unexpectedly strong report on economic growth. REUTERS/Carlo Allegri (UNITED STATES - Tags: BUSINESS)

* In US economic data, the final estimate of economic growth for the September quarter showed a 5.0% annualised pace, above estimates of 4.3% and the fastest pace in 11 years. Chain store sales were up 5.3% in the latest week, up from 4.1% in the prior week. New home sales fell 1.6% to a 438,000 annual pace in November. Personal income rose by 0.4% in November with spending up 0.6%. Home prices rose 0.5% in October to be up 4.5% on the year.

* European shares were firmer on Tuesday with the FTSEurofirst 300 index up by 0.6% and the German Dax also up by 0.6%. Good economic news from Spain and Portugal offset concern that elections in Greece may put that country's bailout package at risk. In London trade, the FTSE rose by 0.3% while shares in BHP Billiton and Rio Tinto lifted 1.1%. In the UK, the current account deficit rose to a record 6.0% of GDP.

* US sharemarkets rose again on Tuesday with blue-chip stocks leading the way on optimism about the economy. But technology shares lagged, dragged down weakness in the biotechnology sector. At the close of trade the Dow Jones index was up by 65 points or 0.4% to a record high of 18,024 points with the S&P 500 index up by 0.2% to record highs. But the Nasdaq was lower by 16 points or 0.3%.

* US treasuries fell on Tuesday (yields higher) in response to strong US economic data, leading investors to prefer equities over bonds. US Treasury sold $35 billion of 5-year notes and $13 billion of reopened 2-year floating rate notes on Tuesday and will sell $29 billion of 7-year notes on Wednesday. US 2 year yields rose by 8 points to 0.743% while US 10 year yields were up 10 points to 2.26%.

* Major currencies fell against the greenback in the US session after lifting in the European session on Tuesday. The Euro eased from highs near US$1.2245 to around US$1.2165 and was near US$1.2170 in late US trade. The Aussie dollar rose from lows near US80.90c to highs around US81.40c but then fell back to US80.90c in late US trade. And the Japanese yen weakened from 120.04 yen per US dollar to JPY120.80 and was near JPY120.75 in late US trade.

* World oil prices rose on Tuesday after data showed the US economy growing at the fastest annual rate in 11 years. Brent crude rose by US$1.58 or 2.6% to US$61.69 a barrel. US Nymex crude rose by US$1.86 or 3.4% to US$57.12 a barrel.

* Base metal prices fell by up to 3.4% on the London Metal Exchange on Tuesday with tin leading the declines. But zinc lost just 0.1% with aluminium and copper down 0.4-0.5%. Gold eased in response to a firmer greenback on Tuesday with Comex gold futures down by US$1.80 an ounce or 0.2% to US$1,178.10 per ounce. Iron ore fell by US$2.40 or 3.7% to US$65.60 a tonne on Tuesday.

Ahead: In Australia no economic data is scheduled. In the US, weekly data on housing finance and jobless claims are expected.

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