A surprise jump in job creation helped Australian stocks reach their highest level in more than a week as Asian markets joined a global rally.
At lunchtime the ASX 200 was up 58 points or 1.45% at 4113 and on track for its third straight gain. The morning's biggest sector gains came in financials +2.1%, IT +2%, metals & mining +1.5% and consumer discretionary +1.5%. Utilities -1.1% and gold stocks -0.4% were the only sectors to reverse.
Already ahead more than 50 points, the benchmark index extended its gains following the 11.30am EST release of May job figures that revealed surprisingly strong job creation. The economy added 46,100 new full-times jobs and cut 7200 part-time jobs for a net gain of 38,900 jobs. Economists had been predicting little change. Despite the gains, the unemployment rate ticked up from 4.9% to 5.1%, in line with expectations.
"It looks like we've all got the economy wrong," Matthew Johnson, senior economist at UBS, told Fairfax. "GDP data showed the economy was growing above trend, while jobs data suggests it is growing around trend. The domestic case for further easing has disappeared and if they do ease further, it will be after they see weaker data or after a big drop in global demand."
The May building activity report continued a two-year downward trend, contracting for a 24th straight month. The AIG-HIA performance of construction index eased 0.2 points to 34.7.
Japan's Nikkei rallied 1.65% this morning, Shanghai 0.27% and Hong Kong's Hang Seng 1.26%. Dow futures were recently up 32 points or 0.2%.
Crude oil futures were unchanged at US$85.52 a barrel. Spot gold was 90 cents weaker at US$1,619.70 an ounce. The dollar was buying 99.47 US cents.
If this morning's excitement was too much for your frazzled nerves, I can recommend MGX, BLD and TPI. I opened positions in each of these this morning and can confirm that they are oases of calm and stability. In other words, none of those trades went anywhere and I'm bored silly. These big up-days are great for market confidence but I've never found a reliable way to day-trade them.
I won't be around to launch tomorrow morning's pre-market thread - wife is heading out of town and I have to do some parenting. Anyone interesting in launching the thread? Can be as little or as much as you want. If no takers, then first up tomorrow morning gets the gig. I'll be here for the afternoon launch.
