Is the market now a buy?
July 23rd, 2010 by Bryden Elssmann
Stocks surged on Wall Street following a strong batch of earnings reports which revived optimism about the economic recovery. The Dow jumped 201 points or 2 per cent. While the CBOE volatility index finished below 25 at the closing bell. The rally on Wall Street clawed back the previous sessions losses after the Dow lost 1 per cent in the Wednesday session following comments from Ben Bernanke that the economic outlook is “unusually uncertain”. The 200 point rally on the market was driven by strong earnings from 3M, AT&T and Caterpillar. The gains followed encouraging economic data from the Euro zone. Reports showed the Euro zone’s private sector expanded at a faster pace in July, boosted by an unexpected pick-up in manufacturing whilst retail sales in Britain also beat market expectations.
The Australian market is poised to open stronger, the SPI is currently trading up 66 points at 4440 points. The Aussie dollar is also trading stronger against the greenback at $US0.89. Commodities were also given a boost following improving profit forecasts. Crude oil, copper, gold and other metals also traded higher as investors’ interest in risky holdings increased. Look for a strong performance today from the resource sector. BHP is expected to open higher with the ADR’s having the stock up above $39.
Is the market now a buy? It appears the market has weathered the storm created from sovereign debt issues out of the Euro-zone, weakening Chinese economy and fears of a double dip global recession. For clients who have been on the sidelines, like most investors, please feel free to contact your Freeman Fox adviser to discuss potential strategies.
Contact your Freeman Fox Stockbroker on 07 3031 9960 or 1800 003 369 Ext 7.
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