Good news KOs fiscal cliff
by Peter Switzer
With the Yanks on Thanksgiving, meaning no Wall Street leads today and only a half-day’s trade tomorrow for what the Americans call Black Friday, the fiscal cliff seems to have been forgotten with good news out of China and Europe.
It’s been another bad one for the expert Doomsday merchants with China producing another good economic number and EU stock markets shot up on expectations that Greece will get its new funding on Monday.
The first sign that the fiscal cliff was being downgraded as a serious ill-wind, at least for this week, was our market jump yesterday with the S&P/ASX 200 index up 43.6 points or one per cent to 4413.1. This was driven by the HSBC Purchasing Managers Index, which spiked to a 13-month high of 50.4.
The thinking, sorry, the revised thinking, is that if China’s manufacturing is getting better, so will the demand for products such as our key exports — iron ore and coal.
In Europe, the EU’s heavyweight official Ollie Rehn says there is nothing in the way of Greece getting its next round of funding and that helped the German DAX shoot up 0.84 per cent and the FTSE 0.68 per cent.
There was also good news for Spain where a three-year bond issue was flooded with lenders willing to accept 3.617 per cent, which is lower than the last auction.
OK, next week the Yanks could spoil this party but what I’m seeing is what I predicted, though it’s coming a little quicker than I tipped. China is coming good, the Europeans are muddling through, keeping Greece on funding life support, and now all we need is a good conclusion to the fiscal cliff issue.
Onward and upwards to next week, but our American buddies could create a challenge or two before the year’s out, however, I’m still backing a nice rally to end the year.
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Published on: Friday, November 23, 2012
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