The ASX 200 rallied yesterday, finishing the day up 0.92% and US stocks had a second strong session in a row last night . . .
US stocks had a second strong session in a row last night, opening higher, trading up for the next hour and then remaining at this level for the rest of the session. The Dow Jones finished up 1.41% and the S&P 500 1.30%. Market optimism has hit a high point after the US and China have reportedly agreed to sit down in October to discuss trade. The UK’s FTSE 100 declined overnight, possibly due to a fairly substantial rally in the pound verses the US dollar over the past three days.
The ASX 200 rallied yesterday, finishing the day up 0.92% on the back of the rally in US stocks the prior day. This is a one month high and represents a breakout from the trading range that has persisted since the early August declines. Consumer staples was the best performing sector, climbing 2.3%. Many economists still believe the Reserve Bank of Australia will need to further cut interest rates to stave off a domestic slowdown. The ANZ Bank, for example, expects the cash rate to fall to a low of 0.25%.
Commodities & Currencies
Gold prices fell sharply on the improved sentiment with the US dollar price falling 2% ($32) to $1,517 per ounce. This, combined with the strong AUD, brought the Aussie dollar price down to a two week low of $2,228 per ounce. Oil prices, on the other hand, benefited from a larger than expected draw down in US inventories, as well as a slight drop in US production. This pushed WTI oil up to $57.50 per barrel although the price completely retraced this rally to finish virtually unchanged over the past 24 hours. The market continues to price oil based on the expectation of a future surplus despite the current tight market.
The spot price of gold is currently down 2.1% at US$1,518 per ounce.
The AUD is currently up 0.27% at US$0.681.
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|ASX Value Strategy||S&P/ASX 200 Accum Index|
|Construction||Ten stocks of the best quality stocks selected from the ASX 200 index||Free-float-adjusted market cap weighted comprising 200 of largest ASX stocks|
|Management||Rebalanced once per month on the 5th of the month||Rebalanced four times per year according to market cap and liquidity|
|Annual Avg. Return*||16.4% per annum, before fees||8.4% per annum, before fees|
|Worst 12-month Return*||-42% (Feb-08 to Feb-09)||-40% (Nov-07 to Nov-08)|
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