Australian Stock Market Report – Morning October 24, 2014

Car manufacturing — A worker assembles a car at a Nissan's manufacturing plant in Rosslyn, outside Pretoria, September 11, 2009. Reuters/Siphiwe Sibeko

* US economic data, jobless claims rose by 17,000 to 283,000 last week. US markit "flash" manufacturing fell by 57.5 to 56.2 October. Across the sub-indices, new orders growth eased markedly, with new export sales falling sharply. US FHFA home prices rose 0.5% in August to be up 4.8% over the year. The US leading indicators index rose by 0.8% in September - pointing to solid growth economic for the rest of the year.

* European shares rose in a choppy trading session on Thursday. The economic data was upbeat with the Markit "flash" Euro zone manufacturing index lifting from 50.3 to 50.7 in October. But it took the lift in US markets and strong US earnings to drive European markets higher. The FTSEurofirst 300 index rose by 0.7% while the UK market rose by 0.3% and the German Dax lifted by 1.2%. But Australia's major miners were weaker in London trade with shares in BHP Billiton down by 0.4% while Rio Tinto lost 0.9%.

* US sharemarkets rallied sharply on Thursday. Strong earnings results from industrial bellwethers were the catalyst for the lift in sentiment. Caterpillar (up 4.6%) and 3M (up 4.5%) beat expectations and raised full-year outlook. The S&P industrial sector climbed 2.2%. However gains were pared back marginally late in the session after news broke that a New York doctor may have contracted Ebola. The Dow Jones peaked almost 310 points higher before closing up by almost 217 points or 1.3 per cent with the S&P 500 index up by 1.2% while the Nasdaq gained 70 points or 1.6%.

* US treasury prices fell on Thursday (yields higher) as investors digested good corporate earnings and strong economic data -reducing the demand for safe-haven government bonds. US 2 year yields rose by 2 points to 0.39% while US 10 year yields rose by 5 points to 2.28%.

* Major currencies were mixed against the greenback over the European and US sessions on Thursday. The Euro hit early lows near US$1.2615 before lifting to highs near US$1.2675, ending US trade near US$1.2650. The Aussie dollar held between US88.05c and US87.50c ending the US session near US87.55c. And the Japanese yen weakened from 107.15 yen per US dollar to JPY108.35, ending US trade near JPY108.15.

* World oil prices rebounded on Thursday after an industry source said Saudi Arabia cut output in September despite reporting a lift in production to OPEC. Brent crude rose by US$2.12 or 2.5% to US$86.83 a barrel while the US Nymex crude price rose by US$1.57 or 1.9% to US$82.09 a barrel.

* Base metal prices were mostly weaker on the London Metal Exchange on Thursday, with the exception of copper (up 1%). Aluminium (down 1.2 %) led the declines. Gold fell on Thursday with the Comex gold futures quote down by US$16.40 an ounce or 1.3% to US$1,229.10 per ounce. Iron ore fell $1.50 to US$80 a tonne.

Ahead: In Australia, no economic data is released. In the US, new home sales figures are released. UK September quarter GDP is released.

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