** 09/02/11 - 8.20am - by James Gerrish**
Yet another positive session in overseas markets with the
DOW JONES adding +71 points or +0.59% to close at 12161. In London the FTSE 100 recovered from some early weakness to close up +40 points to 6091. Locally, the FUTURES markets are pricing in a rise of +14 points when trading kicks off this morning.
China continued to tighten policy last night by raising official interest rates by another 0.25% taking the benchmark rate to 6.06%.This is only the start given that official savings rates are at 3% and inflation is sitting at 6.7%. This means it's better to spend your money today than put it in the bank to buy something next week or next month - as you'll get less for your money.
The market took this in its stride last night with commodities firmer across the board. Generally when we see a move by China to curb inflation (Growth), commodities take a hit. I guess we're all focussed more intenetly on the news coming from the US which continues to impress.
GOLD was interesting last night and seems a strong BUY at current levels -
SEE CHART - Although the US economy is improving whilst ever there is stimulus in place, the USD will be under pressure and hard assets such as commodities will be supported.
Reporting season is well underway in the Australia and we've had CBA deliver a very solid result this morning. with profit coming in at $3.39 billion against market expectations of around $3.2 billion - one factor worth noting was a sharp reduction (48%) in bad and doubful debts - very good sign. Dividend was announced at $1.32 per share fully franked - Better than we had expected at 1.29 and up on PCP last year of $1.20
We've also had Boral (BLD) out this morning which came in line with expectations. Others to report today include: AEO (Interim $34.7 mil), ANN (Int $51.2 mil), CPU (Int $161.7 mil)m OZL, (Final $586.6 mil) & SGP (Int $365 mil)
