stage is set for the biggest run of 2012, page-244

Market wrap for 20 April 2012:

Resilience in resource stocks is again set to shield the Australian share market from the worst of a negative session on Wall Street after economic data disappointed and European markets slumped.

The June SPI 200 futures contract ended the night session just three points or less than 0.1% weaker at 4369 as BHP and Alumina rallied in the US despite a second losing session for most US-listed stocks.

The S&P 500 lost 0.59% as solid earnings results were overshadowed by weak employment, manufacturing and housing news. The Dow fell 69 points or 0.53% and the Nasdaq lost 0.79% as Apple resumed its decline.

Weekly jobless claims neared a four-month high last week, thwarting economists' predictions that recent rises were mostly due to seasonal factors. Manufacturing activity in the Philadelphia region was weaker than expected last month and housing sales dropped for the third month in four. Concerns over the economic outlook were partly allayed by a leading index of economic indicators, which pointed to a steady if modest improvement this year.

TRADING THEMES TODAY

OUT-PERFORMING FOR ONCE: It's been standard practice over the last few years to grumble about our market's under-performance relative to the rest of the world. Not so this week, with the XJO yesterday recording its highest close in eight months. The primary reason is renewed buying interest in BHP and Rio Tinto after their production updates painted a brighter outlook than the market expected. There were also reports of market rumours yesterday of more monetary easing to come in China. The big miners should cushion our market from too much downside today, but let's hope there's more movement elsewhere than we saw yesterday.
With bio-techs running hot on the domestic market, it's worth noting that the New York Stock Exchange Biotechnology Index jumped 5.95% last night. Defensive sectors also advanced in the US.

ECONOMIC NEWS: Quarterly import prices are due at 11.30am EST. The IMF and G20 meet tonight, with Europe likely to be on the agenda. A busy week for US economic news ends quietly - no major releases scheduled tonight.

NOTE: “Manufacturing activity in the Philadelphia region was weaker than expected last month and housing sales dropped for the third month in four.’

When you think about this a little, it’s not hard to imagine the political and business and manufacturing leaders in Northeast USA looking to fracking of Natural Gas, to be their saviour to their flagging depressed economy.

EEG is so well placed to help in that imperative recovery.