Australian Stock Market Report – Morning 1/2/14

US MORNING REPORT
(6.50am AEDT)

In US economic news, S&P Case Shiller composite house price index rose by 1% in October against expectations of a 0.8% rise. Compared to a year earlier house prices were up 13.6%.

European shares were closed on Jan 1, however ended 2013 on a positive note. Volume remained light given the holiday period. The FTSEurofirst 300 index lifted by 0.3% on the last day of trade in 2013 with the UK FTSE also gained 0.3%. For the year the FTSEurofirst 300 gained 16% - best year since 2009. The UK FTSE gained 17% over 2013, while the German Dax lifted by 26%.

US share markets were closed on Wednesday for the Jan 1 public holiday. However on Tuesday markets recorded healthy gains, closing out the best year in more than 15 years. On Tuesday the Dow Jones rose by 72 points or 0.4pct, while the S&P 500 gained 0.4% and the Nasdaq rose 23 points or 0.5%. Trading volume was once again light. For the year, the Dow Jones was up 26.5% - biggest gains since 1995. The S&P 500 rose 29.6% - best performance since 1997, while the Nasdaq rose by 38.3% - strongest annual gains since 2009.

US treasury markets were closed for the Jan 1 holiday. However benchmark yields closed 2013 at their highest levels in 30 months. For the year, US 2 year yields rose by 13 points closing at 0.38%, while US 10 year yields rose by 127 points closing at 3.03%.

The Euro managed to close 2013 as the world´s best major currency. Over the year the Euro gained 4% against the US dollar and 26% against the Japanese Yen. While the US dollar lifted by 21% against the Japanese Yen. The Euro was currently trading at around US$1.3755 in morning trade. The Aussie dollar held near US88.90c. And the Japanese yen is currently trading around JPY105.30.

World oil prices edged lower on the last day of 2013 and were closed on Jan 1. Brent crude finished the year just 0.3% lower at US$110.80 a barrel while US Nymex crude rose by 7.2% over the year to US$98.42 a barrel.

Base metal markets were closed on the London Metal Exchange on Monday. For the year Zinc was the best performing industrial metal despite declining 1.2%. Over 2013 Nickel lost 18.5% while aluminium fell 13.2% and copper lost 7.2%. Gold fell on the last day of 2013. The Comex gold futures price lost fell by US$1.50 or 0.1% to US$1,202.30 per ounce. For the year Gold lost 28% snapping a 12-year winning streak. The iron ore price was unchanged at US$134.20 a tonne. For the year iron ore lost 7.4%.

Ahead: In Australia, RPdata Rismark house prices data and the PMI figures are released. In the US, ISM manufacturing and construction spending are released.

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