daytrades august 1 afternoon

Thanks Endless. Half-time round-up:

News of a deal to raise the US debt ceiling fuelled a relief rally across regional markets this morning and delivered the biggest surge in Australian shares in a year.

At lunchtime the ASX 200 was ahead 90 points or 2% at 4514 after earlier hitting a high of 4517. All sectors were trading positive, led by financials +2.5%, materials +2.4% and energy +2%.

The gains followed an announcement this morning by US President Barack Obama and Senate leaders that they have agreed a deal to cut spending and increase the federal debt ceiling. The agreement clears the way for a compromise package to be approved in the next 48 hours in the US House of Representatives and Senate, ending a deadlock that threatened the US's triple-A debt rating.

"Markets are loving it [but] the vote hasn't happened yet," Joseph Palmer & Sons director Alex Moffatt told Fairfax. "This is really the turning point - now they've really got to work at addressing the debt."

Asian markets roared higher as US futures pointed to a strong open to tonight's trade. Dow futures were recently up 171 points or 1.4%. Japan's Nikkei rallied 1.84% and Hong Kong's Hang Seng put on 1.53%. The reaction was more muted in China, where Shanghai eked out a 0.2% rise.

Oil and the Australian dollar rallied while gold fell back as traders rotated out of "safe havens" into riskier assets. Crude oil futures were recently up $1.25 or 1.3% at US$96.95 a barrel. Spot gold was $15 weaker at US$1,612.20 an ounce. The dollar was buying US$1.1045.

The morning's domestic economic news was mostly downbeat ahead of tomorrow's Reserve Bank cash rate decision. Manufacturing contracted last month, inflation rose by 0.3%, house values in capital cities fell in June for the sixth straight month and sales of new homes suffered their biggest monthly reversal in five years.


Ring-a-ding-ding. The relief rally we had to have is finally upon us. Barring surprises or rethinks, there should be a few decent days in this. Sessions like this tend to leave you feeling like you should have done better, however well you went. I caught relief runs in MGX and JHX (usually a fair proxy for US sentiment). Scalped the drop in GPT and added a few AUN after it broke above the recent consolidation zone - more of a medium-term position, that one. Also got some AWE at support. Hope we've all done well this morning.