Australian shares dipped this morning following a blow-out in the trade deficit and a mixed morning in Asia.
At lunchtime the ASX 200 was 20 points or 0.4% lower at 5096 after running as high as 5135. Declines in health stocks -0.7%, telecoms -0.7% and financials -0.4% offset gains in gold +1.5%, materials +0.5% and consumer staples +0.5%.
"The market is certainly not as cheap but, we don't think it's overpriced," Angus Gluskie, managing director of White Funds Management, told Bloomberg. "Most investors believe the growth upside outweighs the risks."
A 1% dip in exports saw the trade deficit widen twice as much as economists expected. The $1.057 billion gap between imports and exports was attributed to a fall in coal prices. A separate report this morning showed building activity contracted for a 33rd straight month but at the slowest rate since 2010.
Asian markets were mixed. Shanghai slipped 0.39%, Hong Kong's Hang Seng lost 0.34% and Japan's Nikkei advanced 0.79% to break the 12,000 level for the first time in four and a half years. Dow futures were recently off three points or less than 0.1%.
Crude oil futures retreated six cents this morning to US$90.38 a barrel. Spot gold was $1 ahead at US$1,582.80 an ounce. The dollar was buying $US1.0229.
The XJO has failed to string together three winning days since cracking 5100 on Feb 20. Since then the pattern has been two steps forward, one or two back. The trend is still upwards but the angle is shallower. The XSO, on the other hand, peaked on Feb 18 and has floundered since. This bull market looks nothing like the raging bull of the early/mid 2000s and is certainly not as lucrative. Or at least not yet. I've had a reasonable morning but it could have been much better with a little luck. I liked the look of AKK for quick bounce from 2.5. All went to plan until the buying dried up a few hundred shares short of my sell at 2.6. Too many stale hands. At this stage an exit for brokerage looks like a good result. Better trading in MFG, even if I missed the 2nd, more profitable bounce. Also got back into BLY near the low - so far so good.
