Market Colours Fade

Another lift in oil prices overnight could underpin the Australian share market today. A weaker USD pushed gold and most industrial commodities, pointing to a second day trading a resource led market. The performance of banks could determine the day’s result, but benign trading conditions and a lack of turnover suggest market moves will be muted in response to a little changed investment environment.

US company reporting is a key factor this week, and Alcoa released results overnight. The same analysts who bemoaned “jobless recovery” two years ago, and a profitless volume recovery a year ago, are highlighting the undermining of a recovery in profit by a fall in revenue. In the meantime, investors who are not subscribers to the “perfect world” theory of markets got on with buying Alcoa.

Futures markets are pointing to a mildly lower open across the Asia Pacific region today. The state of the Australian sentiment is front and centre. Information about consumer confidence, credit card activity and business conditions and activity, all drop during today’s session. Yesterday saw pressure on consumer staple stocks in reaction to the restatement of Target’s first half earnings. Today’s data will either refute or confirm the selling.