Macro leads point to a stronger day for investors in the Asia Pacific region. Rallies in global shares and industrial commodities indicate a pro-growth stance for markets, despite modest support for bonds overnight. However corporate reports will likely determine the outcome in Australia, continuing the trend of the week.
US PMI data released overnight not only showed ongoing expansion in both services and manufacturing but beat optimistic forecasts. Oil and copper markets rallied. Stocks also rose although the temporary disdain for tech stocks showed in the negative performance of the Nasdaq. Recent poor reports from Australian tech stocks echo this theme.
Major reports today include Woolworths, Southern Cross Media, MYOB and Mayne Pharma. Woolworths reported a 4% lift and revenues and a 15% in net profit, both likely to please investors. Food sales grew 5%, a positive for the economy as well as Woolworths. However the stock rallied hard into the result, reaching an earnings multiple of 21x and key resistance levels close to $28 a share. If Woolworths shares suffer a “sell the fact” response it may sour any opening gains for the ASX 200.
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