The share market is within reach of a five-year closing high following a strong morning for resource stocks and well-received profit reports from APN, Infomedia and Magellan Financial Group.
At lunchtime the ASX 200 was ahead 34 points or 0.6% at 5447 and on track to top a five-year best close of 5441 set in late October. Gold stocks led the rally, rising 2.2%, ahead of metals & mining +1.5%, materials +1.4% and consumer staples and property trusts +1.1%. Shares in NAB fell nearly 2% after the bank reported lower margins last quarter.
The morning's gains came after news of an acceleration in manufacturing in the US soothed nerves over a recent run of soft economic data.
"The market thinks for now that underlying US economic trend remains strong and things will get better in the spring," Sho Aoyama, senior market economist at Mizuho Securities, told Reuters.
China's Shanghai Composite retreated 0.64%, Hong Kong's Hang Seng rallied 0.69% and Japan's Nikkei put on 1.91%. Dow futures were recently up 22 points or more than 0.1%.
A rebound in gold abated this morning. Spot gold was $3.20 weaker for the morning at US$1,320.30 an ounce. Crude oil futures were at US$102.73 a barrel. The dollar was buying 89.92 US cents.
The quote of the morning came from the number two man at Goldman Sachs, Gary Cohn: "If we continue to live in a world where safety and soundness and inflappability of banks trumps everything else, trumps economic growth, and trumps liquidity you are going to continue to see shadow banks grow bigger and bigger until of course maybe shadow banks become the next problem or until liquidity becomes the next crisis." Ah, so even though lack of regulation caused the last crisis, too much regulation is going to cause the next one. Nothing remotely self-serving about that claim, eh Gary? Must reckon we're all amnesiacs. Back to trading: solid morning here. Rode the second bounce in RRL and got a slim scalp out of CDA. Exited PDN from late yesterday for beer money.
