Thanks Oscar and morning crew.
Half-time round-up:
Shares pared early gains this morning as news that the economy grew last quarter at the fastest pace in four years dulled the outlook for further rate cuts.
At 1pm EST the ASX 200 was 12 points or 0.2% ahead at 5426 after earlier rising as high as 5440. The shine was off the rally before the 11.30am EST release of GDP data showing annual growth of 3.3% in the second quarter, the strongest rate since 2012. The quarterly rise was 0.5%, largely driven by increased government spending. The Australian dollar held broadly steady at 76.73 US cents, after the figures came in much as expected.
"Goldilocks economy continues," tweeted journalist and market commentator Marcus Padley. "New RBA governor will be chilled and relaxed apart from that pesky high AUD."
Resource stocks benefited from a decline in the greenback overnight as the recent run of soft US economic data continued. The gold sector surged 5.4%, metals & mining 1.4% and materials 0.9%. The Small Ords gained 1%. Weighing on the market were declines in energy -1.1%, utilities -0.4% and health -0.2%.
“The trifecta of terrible ISM manufacturing and non-manufacturing PMIs and weaker-than-expected non-farm payrolls [in the US] have left the quixotic calls for a September rate hike dead in the water,” Angus Nicholson, market analyst at IG, told
Bloomberg. “This is no longer a September story - for even a December rate hike to occur both of the ISM PMIs are going to have to stage quite a rapid recovery in the next month or so.”
China's Shanghai Composite improved 0.41%, Hong Kong's Hang Seng eased 0.05% and Japan's Nikkei lost 0.66%. Dow futures were recently ahead six points or 0.03%.
Crude oil futures firmed 12 cents or 0.27% this morning to US$44.95 a barrel. Gold futures were $1.20 or 0.1% stronger at US$1,355.20 an ounce.
We know correlation does not imply causation, but the last time Australia was in recession was the year I arrived. I stepped off the plane, rolled up my sleeves and went to work. The nation has not suffered a recession since. Just saying.
Trading: increasingly wary of XPE - bit slippery to put out one price-sensitive announcement pre-market to pump the share price, then another 15 minutes into the session. It's a fine trading stock, but I wouldn't marry it. Me, I got a wage out of the initial bounce in ZMI.
