Australian Stock Market Report – Morning July 21, 2014

Arab Stock Market — Investors speak as they monitor screens displaying stock information at the Abu Dhabi Securities Exchange in this June 25, 2014 file photo. Dubai's stock index rebounds into positive territory as investors buy beaten-down property-related stocks, after the market earlier plunged as much as 5.4 percent. The index recovers to stand 1.1 percent higher at 3,987 points, bouncing back above the 200-day average at 3,866 points, which is seen as an important technical indicator. REUTERS/Stringer/Files (UNITED ARAB EMIRATES - Tags: BUSINESS)

Investors speak as they monitor screens displaying stock information at the Abu Dhabi Securities Exchange in this June 25, 2014 file photo. Dubai's stock index rebounds into positive territory as investors buy beaten-down property-related stocks, after the market earlier plunged as much as 5.4 percent. The index recovers to stand 1.1 percent higher at 3,987 points, bouncing back above the 200-day average at 3,866 points, which is seen as an important technical indicator. REUTERS/Stringer/Files (UNITED ARAB EMIRATES - Tags: BUSINESS)

Morning Report
(05:15 AEST)

In US economic data the leading index rose by 0.3% in June, short of the 0.5% forecast gain. The consumer sentiment index eased from 82.5 to 81.3 in July, short of the 83.0 forecast result.

European shares were mixed on Friday with investors focussed on increased tensions between Russia and western nations. The FTSEurofirst 300 index was flat with the German Dax down by 0.4% while the UK FTSE rose by 0.2%. Australia´s major miners were mixed in London trade with shares in BHP Billiton up by 0.1% while Rio Tinto lost 0.6%.

US sharemarkets rebounded on Friday with technology stocks leading the gains in response to earnings results. In response to earnings results shares in Google rose by 4.2% but shares in General Electric fell by 0.6%. Thomson Reuters reports ´´data also showed that of 82 companies in the S&P 500 that had reported earnings through Friday morning, 68.3% beat Wall Street´s expectations, roughly in line with the 67% rate for the past four quarters and above the 63% rate since 1994.´´ The Dow Jones index rose by 123 points or 0.7% with the S&P 500 index up by 1.0% while the Nasdaq rose by over 68 points or 1.6%. Over the week the Dow Jones rose by 0.9% with the S&P 500 up by 0.5% while the Nasdaq rose by 0.4%.

US treasury prices were weaker on Friday (yields higher) as investors unwound safe-haven positions, although losses were tempered by soft economic data. US 2 year yields were up by 2 points to 0.484% while US 10 year yields were up by 3 points to 2.48%. Over the week US 2 year yields were up 2 points while US 10 year yields were down by 7 points.

Major currencies were modestly firmer against the US dollar after the close of European and US sessions on Friday. The Euro fell from highs near US$1.3535 to around US$1.3490, before rebounding to US$1.3530 at the US close. The Aussie dollar rose from lows near US93.60c to highs near US94.05c before ending the US session near US93.95c. And the Japanese yen held between 101.26 yen per US dollar and JPY101.43, ending US trade near JPY101.32.

World oil prices eased on Friday as investors booked profits at the end of the week. Brent crude fell by US65c or 0.6% to US$107.24 a barrel and the US Nymex price fell by US6 cents a barrel or 0.1% to US$103.13 a barrel. Over the week Brent crude rose by US38c or 0.4% with Nymex up by US$2.30 or 2.3%.

Base metal prices fell by up 2.8% on Friday with nickel leading the declines. But lead was unchanged. Over the week metals were mixed with nickel down 3.7% while aluminium rose by 2.3%. Gold prices fell on Friday as safe-haven positions were unwound with the Comex gold futures quote down by US$7.50 or 0.6% to US$1,309.40 per ounce. Over the week gold fell by US$28.00 or 2.1%. Iron ore fell by US90c on Friday or 0.9% to US$96.90 a tonne. Over the week iron ore was unchanged.

Ahead: The State of the States report is released. In the US, the National Activity index is issued.

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