Press Release – CMC Markets
Despite a slow start to the day due to Apples disappointing result overnight our markets have done a u-turn in afternoon trade and are now showing signs of life following the Chinese flash PMI read which posted its fifth consecutive rise.15.16 AEDT, Thursday 24 January 2013
Markets recover following positive Chinese manufacturing data
By Ben Taylor (Sales Trader, CMC Markets)
Despite a slow start to the day due to Apple’s disappointing result overnight our markets have done a u-turn in afternoon trade and are now showing signs of life following the Chinese flash PMI read which posted its fifth consecutive rise.
Traders view todays PMI manufacturing result as providing further evidence that the Chinese recovery is underway and will be maintained. The read echoes the IMF’s forecast overnight which has China’s growth at 8.2% for 2013.
However, Apples result had analysts questioning Apples dominance given increasing competition in what is now considered a saturated mobile device market.
Traders are now looking for the next catalyst to drive the markets higher. Many are pointing to continuous central banks support around the world, a rebounding China, improving risk in Europe and general low inflation as drivers.
Domestically, investors see any fall in Australian growth to be met with rate cuts which should be supportive for yield plays like the banks. This year’s election is also a catalyst for fiscal loosening which is believed to be favourable for our equity market.
The Australian banks imposed capital requirements along with conservative management style have helped to lower the banks inherent risk profile. Whilst the banks continue to offer compelling yields we will continue to see support for bank shares despite being now regarded as expensive.