Market Update (Friday 21 Feb 2014)
Today the All Ordinaries Index closed at its highest level since 19 June 2008 as Australian company earnings continue to impress, but also following a strong lead from Wall St overnight.
Interestingly, investors have been dismissing disappointing US economic data of late, pointing to harsh winter weather as a reason for unexpected weakness. Instead, investors have been taking a relatively optimistic view, positioning themselves for an improving growth trend in the US, betting that improved earnings will be enough to lift the market further this year.
In other words, sentiment, for better or for worse, is finally taking on a life of its own, pushing up US markets (and in turn our own), despite mediocre to 'ok' earnings results. Of course, we'll need to see concrete improvement over the coming months to justify the optimism, and clearly there are are some headwinds out there if you really want to worry (Fed tapering, lower Chinese and Australian growth, Ukraine debt default etc.), however, for now, our general view remains unchanged - we're still at 8pm, on the 'Economic Clock' (a quaint measure, certainly, but a useful tool just the same) View Economic Clock Here Enjoy your weekend. Rick Maggi (Westmount. Financial Solutions.)