Rip-roaring Wall Street
by Peter Switzer
As if willed by a desperate optimist like yours truly, Wall Street has turned on a dime and headed up. And it was good economic news that helped the market move higher.
The 2.76 per cent jump in the Dow Jones — that’s 273 big points — and the two per cent plus rises in the S&P 500 and Nasdaq indexes were great signs that the bears are not in control. This good day for shares should help build a base, which should see the current correction turn into a rally, though there still could be a few tests before it’s all sunshine and blue sky.
Last night on my program on Sky News Business Channel, Shane Oliver — chief economist at AMP — and UBS fund manager George Boubouras both told me that they thought we were in a foundations building stage for the next move up. Let’s hope they’re right.
The good news
- Oil prices went over US$75 a barrel with the International Energy Agency seeing higher demand and the supply implications of the Gulf leak disaster working to raise oil prices.
- The foreclosure rate in the US kept dropping in May.
- The European Central Bank and the Bank of England left interest rates unchanged.
- There was strong demand for Spanish bonds which helped the euro and says something about the negative speculation against European debtor nations.
- The euro has had three days of rises and I believe currency is often the canary in the coal mine, so this could be a good sign.
- The better-than-expected export news from China has also buoyed the market on the basis that even with its most important customer — Europe — in the doldrums, China has shot the lights out on its export showing. They were up 50 per cent on a year ago, which is not a bad effort.
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Published on: Friday, June 11, 2010blog comments powered by Disqus