Wall Street took a tumble last night. There were two main reasons for this. Woeful housing numbers (data showing the steepest monthly drop in housing starts in nearly 27 years), and the potential for a nuclear meltdown in Fukushima. To add insult to injury there was also an uprising in Bahrain.
Currencies and commodities markets don't appear to have been too affected by these developments, although the Aussie dollar is suffering from reduced risk appetite and the prospect of less demand for commodities moving forward. In fact just on the Aussie dollar, it seems to have found support around the 97.5 US cents level.
So did the Aussie share market dodge a bullet today? Not really. Fact is we've likely factored in most of the recent news events. Myer's result today highlights our two speed economy, we know that the US housing market is still in the doldrums, Middle East tensions continue, and the Japanese crisis is still unfolding.
What we did see today though was a late session rally on the back a 2 per cent rise in resources heavyweight Woodside Petroleum. They've discovered more gas which means they may be able to expand their Pluto project off WA. Our resources sector is what is driving our economy, and today was a classic example of out that looks from a market perspective.
David Taylor
