The Australian share market is expected to top fresh five-year highs in early trade after US stocks made gains on disappointing economic data which renewed expectations the Federal Reserve will maintain its stimulus measures for the time being.
The US government's September non-farm payroll report showed 148,000 jobs were added last month. That missed expectations for a gain of 180,000 however the unemployment rate ticked lower to 7.2 per cent. The report was delayed by more than two weeks because of the government shut-down.
Traders say the jobs data has many thinking the US Fed policy is shifting from whether it will start to pull back on its easing efforts, to how long it will wait.
Currencies
That pushed the greenback down against most currencies, including the Australian dollar, which hit a five-month high. At 8:10AM the Aussie was buying $US97.13 cents, 59.85 Pence Sterling, 95.34 Yen and 70.49 Euro cents.
Figures
Wall Street was buoyant: The Dow Jones Industrial Average surged 75 points to close at 15,468, the S&P 500 added 10 points to close at 1,755 and the NASDAQ gained 10 points to close at 3,930.
European markets followed suit: London’s FTSE lifted by 41 points, Paris gained 19 points and Frankfurt jumped 80 points.
Asian markets were mixed. China's Shanghai Composite lost 0.8 per cent, pulling back from the previous session's sharp rally, as data showed average home prices rose to another fresh high, sparking fears the government may step in to cool the property market.Tokyo’s Nikkei added 20 points, Hong Kong’s Hang Seng dropped 122 points, and China’s Shanghai Composite fell by 19 points.
The Australian share market closed at a fresh five year high yesterday as investors cheered an increase in production guidance from BHP, which finished as the day’s most heavily traded stock. The S&P/ASX 200 index closed 21 points up to finish at 5,373. On the futures market the SPI is 31 points higher.
Economic news
The Australian Bureau of Statistics will deliver the latest read on inflation today when it releases the third-quarter consumer price index. Economists expect prices may have lifted by 0.8 per cent in the quarter. But some say inflation may fall from 2.4 per cent to as low as 1.8 per cent, raising expectations of another rate cut.
Meantime, the Department of Workplace Relations will unveil its skilled vacancies index for September.
Company news
Treasury Wine Estates Limited
(ASX:TWE) will hold its AGM in Adelaide today – a month after CEO David Dearie left the company following a major write-down of aged and excess stock in the US. Shareholders will no doubt have questions after the company announced a $160 million hit to pre-tax earnings in July and as the search for a new CEO continues. Shares fell 0.84 per cent yesterday to close at $4.73.
Rio Tinto Limited
(ASX:RIO) is tipped to axe hundreds of back office jobs after signing an outsourcing deal with US technology company IBM. Rio has signed a $100 million, 10-year deal with IBM that will allow the miner to cuts costs in areas such as human resources, finance, information technology and procurement. Shares in Rio lifted 0.35 per cent yesterday to $63.97.
Commodities
Commodities bounced on that disappointing US jobs read. Gold is up $26.80 to $US1,342.60 an ounce for the December contract on Comex. Silver is up $0.51 to $22.79 for December. Copper is up $0.03 at $3.34 a pound. Oil continued to spiral on increasing supply data. Oil is down $1.42 at US$97.80 a barrel for November light crude in New York.
