An upbeat morning of local economic news has helped counter early weakness for local shares following a red night on Wall Street.
At lunchtime the ASX 200 was down 27 points or 0.6% at 4425 but off the morning low of 4413. Gains in defensive sectors, including gold and health, partially off-set losses for metals & mining -1%, energy -1% and materials -0.9%.
Better-than-expected local retail sales and building approvals helped over-ride concerns for the outlook for the US. Retail sales jumped 0.7% last month from a 0.2% rise in June, topping expectations for a rise of 0.4%.
There were also hints of a turnaround for the construction industry as building approvals increased for the first month in four. Approvals were up 2.3% last month, the Australian Bureau of Statistics said.
Other reports this morning implied strength in the economy that will give the Reserve Bank pause for thought at its next rate-setting meeting. The trade gap was the smallest in eight years as rising commodity prices narrowed the gap. The current account deficit fell from $16.5 billion in the March quarter to $5.6 billion last quarter.
"It's very bullish data for Australia and I think that talking of a slowing Australian economy is absurdly overdone," ICAP economist Adam Carr told Fairfax websites. "Today's data shows that GDP is looking like it is going to be very strong as well and certainly retail sales are picking up and approvals are picking up. It's just blitzed everyone's expectations."
Asian markets reversed most of yesterday's gains. Japan's Nikkei slipped 2.59%, Shanghai 0.7% and Hong Kong's Hang Seng 0.7%. Dow futures were recently at +9.
Crude oil futures recovered 3 cents this morning, trading recently at at $74.13 a barrel. The spot gold price eased 10 cents to $1,236.90 an ounce. The Aussie dollar was buying 89.44 U.S. cents.
A regulation morning's scalping for this trader. Made the day's wage from two dips in ISF and one in UXC. Small increments but all high-probability trades at the time.
Just a reminder that I will be AWOL tomorrow as the clan gains a new member. If all goes well, I should be clutching a son/daughter by the time the market opens. Perhaps PJ could launch the morning thread? Endless has kindly put his hand up for the afternoon shift.
