Scoreboard: Mid-term mixer

Wall Street was mixed following the mid-term elections, while the greenback rallied, sending the Australian dollar below US86c.

In the US, the ISM services index fell from 58.6 to 57.1 in October, short of estimates near 58.0. The ADP survey of private employment showed that 230,000 jobs were created in October, above estimates near 220,000. And weekly home loan commitments fell 2.6 per cent in the latest week, with new purchases up 2.6 per cent while refinancing fell 5.5 per cent.

European shares rose on Wednesday, boosted by company profits results. Traders will be watching the European Central Bank meeting on Thursday for news of fresh stimulus measures. The FTSEurofirst 300 index rose by 1.7 per cent, the UK FTSE gained 1.3 per cent and the German Dax lifted by 1.6 per cent. In London trade shares in BHP Billiton were up 0.6 per cent with Rio Tinto up 1.1 per cent.

US sharemarkets were mixed on Wednesday. There was relief that the uncertainty of mid-term elections was out of the way, with Republicans winning control of Congress as expected. But tech stocks eased. With an hour of trade to go the Dow Jones was up by almost 84 points or 0.5 per cent after earlier being up over 100 points. The S&P 500 index was up by 0.4 per cent while the Nasdaq was lower by 10 points or 0.2 per cent.

US long-term treasury prices fell modestly on Wednesday (yields higher) in response to stronger equities markets and firmer jobs data. US two-year yields were flat near 0.526 per cent while US 10-year yields were up 1 point to 2.35 per cent.

Major currencies were weaker against the US dollar in European and US trade on Wednesday. The Euro fell from highs near $US1.2560 to lows near $US1.2460, and was near $US1.2475 in late US trade. The Aussie dollar fell from highs near US87.35c to lows around US85.60c, and was near US85.80c in late US trade. The Japanese yen eased from 113.90 yen per US dollar to ¥114.82 and was near ¥114.70 in late US trade.

World oil prices lifted from multi-year lows on Wednesday. While the US dollar was firmer, weekly US crude stocks rose by less than expected and there were reports of a pipeline blast in Saudi Arabia. The fire at the Saudi pipeline has been extinguished. Brent crude rose from 4-year lows, up by US13c or 0.2 per cent to $US82.95 a barrel. US Nymex crude price rose from 3-year lows, up by $US1.49 or 1.9 per cent to $US78.68 a barrel.

Base metal prices were mixed on the London Metal Exchange on Wednesday. Tin and nickel rose up to 0.4 per cent; zinc and lead rose up to 1.4 per cent; but copper and aluminium flat. Gold slumped to fresh 4-year lows on Wednesday with Comex gold futures down by $US22.00 an ounce or 1.9 per cent to $US1,145.70 per ounce. Iron ore fell by $US1.10 on Wednesday or 1.4 per cent to a 5-year low of $US76.00 a tonne.

Ahead: In Australia, monthly employment data is released together with new car sales figures. In the US, data on weekly claims for unemployment insurance is released with Challenger job layoffs and labour cost/productivity estimates.

Craig James is chief economist at CommSec. 

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