Bulls Run
Shares markets in the Asia Pacific region are set for further gains today after a strong night of trading in the US fuelled by better than expected economic data. Volatility remains elevated, and a sudden shift in sentiment is possible. Weaker commodity prices may dim any reporting season inspired enthusiasm for energy and materials stocks. Markets appear to be moving towards a view that the recent sell off is a correction, not a crisis.
August consumer confidence and July durable goods orders both surprised North American analysts by rising further than expected. This seemed to restore the confidence lost in the previous US session when last hour selling turned indices from gains to losses. European markets traded slightly lower in the lead up to the US market open, but this was most likely a reflection of the 4-5% gains the previous night. All was not well however, as a stronger USD induced tumbles in industrial metals and oil prices, suggesting global industrial remains weak.
Australian index futures markets traded into triple digit gains overnight, before settling back to an 83 lift. The bullish opening impulse may be moderated by weaker commodity prices and some misses so far today from corporate Australia. Ramsay Healthcare, fund manager Perpetual and Nine Entertainment have fallen short of estimates, while Boral is broadly in line. Retail Food Group and Southern Cross Media are eagerly awaited.
For further comment from Michael McCarthy at CMC Markets please call 02 8221 2135.
Frequently Asked Questions about this Article…
The bullish trend in the Asia Pacific share markets is primarily driven by strong trading in the US, fueled by better-than-expected economic data such as rising consumer confidence and durable goods orders. This has helped restore investor confidence despite recent volatility.
Weaker commodity prices are dampening enthusiasm for energy and materials stocks, as lower prices can impact the profitability of companies in these sectors. This is particularly relevant during reporting seasons when investors are closely watching company performance.
The recent market sell-off is generally viewed as a correction rather than a crisis. This perspective is supported by the recovery in investor confidence following positive economic data from the US.
Positive US economic data, such as increased consumer confidence and durable goods orders, helped boost investor sentiment globally. However, a stronger USD led to declines in industrial metals and oil prices, indicating ongoing weakness in global industrial sectors.
Australian index futures markets experienced significant gains overnight, but these gains were moderated by weaker commodity prices and some corporate earnings misses. The market is expected to open bullishly, but with caution due to these factors.
Ramsay Healthcare, fund manager Perpetual, and Nine Entertainment have recently fallen short of earnings estimates, while Boral's performance is broadly in line with expectations.
A stronger USD has led to declines in industrial metals and oil prices, suggesting that global industrial demand remains weak. This can have a negative impact on markets that are sensitive to commodity prices.
For further commentary on market trends, you can contact Michael McCarthy at CMC Markets by calling 02 8221 2135.
Call 1300 880 160
Start a chat
Schedule a call
