The S&P/ASX 200 jumped on the open and is up over 2% after midday, due to the “resolution” of the US debt crisis announced this morning. The market is up a total of 90 points or 2% at 4514.
Other Asian markets are experiencing similar gains, with the Nikkei 225 up 1.87% at 10013 points, and the Hang Seng up 1.49% at 22773 points.
Other risk assets are mixed, with the AUD regaining its record high, now at 1.1046 against the USD, whilst gold has sold off, down over 1% to $1614 USD an ounce. WTI crude is up over 1% to $96.99 USD per barrel.
Movers and Shakers
It’s unicorns and rainbows across the board, with all sectors gaining, the financials in front. The banks are all up 2-3%, even Macquarie (MQG) taking part in the free-for-all, up 1.5%
The resource twins BHP and RIO are also in the party, up 2.5% and 2.1% respectively, whilst my preferred offspring – Cochlear (COH) and CSL – are up slightly, 1.4% and 1.7% respectively.
Daily Chart
As I said on Friday:
…if the US Congress can sort out the debt crisis, there maybe a rebound rally overnight that wipes out any shorts put on today
For mind, this is just that – a relief from the doom and gloom of recent weeks, and this “boom” will have a probable target of 4600 points, with the possibility of overshooting to 4700 points, but the latter would take some outstanding good macro-economic news.
The daily chart shows how today’s action replicates the start of the prior two relief rallies – a very strong reversal (which overshadows the previous day(s) bearish action), before a petering action after a week or so as reality (or lunacy as Adam Carr puts it) bites again.
Note bullish candle in previous two relief rallies - there's a lot of selling to overcome
We go into tomorrow as the RBA weighs up a rate rise and into the dual fists of the local earnings season (Rio Tinto reports on Thursday – watch all the updates here) and US unemployment reports on Friday. Hold onto your hats.