A change to mark-to-market rules which permit toxic assets to be valued more sympathetically, more better-than-expected economic news along with good noises out of the G20 meeting in London, all helped the market.
There’s now more support for this rally being for real, however there will be a potentially scary jobs report out tomorrow and companies start reporting next week. If the market can ignore a bad unemployment number, that will be a big plus for the bulls.
These index closes are moving into positive technical areas and traders in the USA are saying more conservative, long only funds are starting to get back into the market.
On the economic front, both factory orders and car sales surprised coming in better than expected, and adding to this better retail and consumer sentiment numbers, a better looking US economy is gradually emerging. However it’s still nothing flash.
A good sign for the local market was a big jump in BHP Billiton’s share price on Wall Street and this goes with a more positive outlook for commodities. Also China’s Purchasing Managers Index (PMI) came in above 50 and that means it’s in expansionary territory. This is a nice plus for China — our second most important trading partner.
Not surprisingly, the Aussie dollar is at 71.54 US cents and this should be a good day for our portfolios.
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