China excited Wall Street and it coped with GM filing for bankruptcy with those so-called green shoots starting to resemble small leaves.
The S&P 500 stormed 23 points higher to 942, leaving the important 928 level behind.
China’s latest manufacturing report reinforced the belief that the world’s third-biggest economy is rebounding thanks to its stimulus package. It puts a confident footing under the struggling world economy.
It also helped oil which went to $US68 a barrel, while the Oz dollar went to 81.04 US cents.
Another positive was the Institute for Supply Management or ISM, which showed manufacturing activity went up to 42.8 in May from 40.1, beating economists’ expectations.
Also, construction outlays rose 0.8% in April compared to March's 0.4%.
On GM, despite the US Government set to own 60% of the new company, its shares went below 50 cents then up to $1 before ending at 75 cents. Meanwhile Ford has gained 17% in two weeks! However, it’s still only a $6 something company.
The second-half of 2009 recovery looks more certain now, which will confound doomsday merchants. It puts the March lows on the market as much less likely to have a re-run and that’s great for investors.
Locally we had a record lift in manufacturing in May, and retail sales rose 0.3% in April after a 2.2% jump in March. This adds weight to my contention that we’re in for a mild recession compared to around the world.
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