Global trends have delivered another strong opening for the ASX 200 this morning. Investors are moving ahead of what is shaping as a solid reporting season, especially in the resources sector.
This morning’s stock market strength comes despite a range of economic data taking the edge off recent strong statistics.
In the US, weaker than expected job growth represented some mean reversion following 2 months of strong data. The overall trend in the US labour market is being seen as consistent with ongoing moderate to solid, as opposed to really strong, GDP growth.
Locally, AIG’s Construction Index, while still indicating ongoing growth, has wound back from last month’s high levels. In what may be a sign of things to come, activity in the housing sector moderated last month as the market softens.
Oil and metals prices are also showing signs of faltering after the recent strong rally and this has led to miing and energy stocks underperforming this morning. The US oil price is now into a range that is anticipated to attract increased shale oil production. Traders may decide that discretion is the better part of valour while markets wait on evidence of what happens to the rig count and production levels over the next couple of months