Afternoon trading Feb 15

Thanks Oscar and morning crew.


Half-time round-up:

Shares rose sharply after Wall Street took strong overnight inflation data in its stride, signalling traders are moving on from last week's correction.

The ASX 200 advanced 53 points or 0.9% to 5894 as a broad rally boosted all sectors. The best of the gains came in metals & mining +2.8%, gold +2.7% and energy +1.8%. The financials sector put on 0.6%. Health was the biggest laggard with a gain of 0.2%.

This morning's action came after Wall Street shrugged off news of a pick-up in inflation. The S&P 500 locked in a fourth day of gains with a rise of 1.34% despite news that the consumer price index [CPI] increased 0.5% last month, versus expectations for a gain of 0.3%. Core inflation also came in stronger than expected.

"The CPI shows there is some inflation, but it was not through the roof,” Bruce Bittles, chief investment strategist at Robert W. Baird in the US, told Reuters. “People got too pessimistic.”

Mixed January jobs figures did not derail this morning's rally. The unemployment rate dipped to 5.5% from a revised 5.6% in December, but optimism over a 16,000 increase in employment was tempered by the fact all the jobs growth was in part-time work.

A strong morning in Asia saw China's Shanghai Composite up 0.45%, Hong Kong's Hang Seng 1.4% and Japan's Nikkei 1.46%. S&P 500 futures were recently ahead six points or 0.22%.

Crude oil futures gained 36 cents or 0.59% this morning to US$60.96 a barrel. Gold futures gave back $1.80 or 0.15% to US$1,356.20 an ounce. The dollar was buying 79.41 US cents.



The great US inflation/rates scare looks like it's over, at least for the time being. Last night was the perfect opportunity for the bears to regain control and it didn't happen. Volatility is falling, trading volumes are receding to near-normal levels. There will be wobbles, of course, but 'normality' is returning. Looks a lot like the bottom is in. Until the next scare. Trading: markets are normalising but a lot of the heat has come out of the specs. I got nothing.