Date December 19, 2014

(1) Comments 221 Read later

Patrick Commins, Jens Meyer

For those going on holidays, wishing you all the best and a safe and happy Christmas and New Year.

For the unlucky rest, see you all again Monday morning from 9.

 

4:55pm: The United States Federal Reserve’s appeasement of both interest rate doves and hawks has sent global sharemarkets into a frenzy. with the Australian index recording its strongest single day in a year and a half .

On Friday, the benchmark S&P/ASX 200 jumped 2.5 per cent, or 127.8 points, to 5338.6, the biggest single-session surge since July 2013. The broader All Ordinaries lifted 2.4 per cent, or 123 points, to 5312.7.

For the week, the ASX200 rose 2.3 per cent, while the All Ordinaries added 2.2 per cent.

All sectors jumped more than 1 per cent on Friday, with industrials up 3.3 per cent, materials 3.1 per cent higher and financials 2.5 per cent stronger, among the best performers.

After a mixed start to the week, the US Federal Reserve helped global markets surge as it shrugged off concerns that a global slowdown could impact the recovery of the American economy, which remains on track, and implied official interest rates will rise next year on its terms. But the Fed on Thursday morning, Australian time, also assured investors that rates wouldn’t rise too fast.

Thursday we had a strong start then we finished a bit weaker, Friday we had a strong start [thanks to the Fed] and it’s kept going. There’s obviously volume coming in , Morgans senior client advisor Alistair McCorquodale said.

It’s pretty broad-based. there’s no particular sector that’s missing out.

Despite Friday’s huge run, the ASX200 is still down 0.2 per cent for the calendar year. and the famed ‘Santa Rally ‘ is yet to have taken full flight.

You can give it lots of names, in reality it’s not happening because the Australia market and economy is looking fundamentally brilliant for next year, it’s happening off the back of momentum drive from offshore , JBWere executive director Mike Kendall said.

4:40pm: Things are looking up for shares, but not so much the currency — which is probably a good thing.

Despite slumping to new four-year lows against the US dollar and dropping against other currencies, analysts believe the Australian dollar still hasnt hit bottom .

Today the currency took a breather from the previous sessions pummeling and edged higher to trade around US81.88 late in the afternoon.

The dollar recorded a new multi-year US81.08 low on Thursday after the US Federal Reserve indicated it could raise rates as early as April next year.

OzForex corporate forex dealer Matt Richardson said US82 was a new point of resistance for the dollar.

Its slipped into a new range on the low side, and its now looking for a new catalyst to push it lower into the US80 range, he said.

Were now looking at a range of US80 to US83 .

But Mr Richardson said it would be surprising if the dollar broke below US80 before the new year.

If we do break US81 there will be support at the US80 mark, he said.

I expect it to be relatively quiet in day-to-day trade . . . there is not going to be any new data out in Australia . . . but there are some unemployment numbers in the US on Wednesday night before Christmas and there will be some core goods GDP [gross domestic product] data.

Mr Richardson said if this US data was strong, it would push the dollar down to US80 before 2015.

On Wednesday the dollar slipped below US82 for the first time in four-and-a-half years and this triggered a mass selloff from investors.

Credit Suisse strategist Damien Boey said the dollar had little support at US82 because of consistent downward pressures.

It was hanging in there as a resistance point for a while, but all the drivers of the currency have just fallen and fallen, he said.

Mid US70 is a reasonable projection for the dollar. For Credit Suisse that target is set for around mid to late next year, but it looks like this could be more of a short-term target.

Mr Boey said there was no end in sight for the falling commodity prices. and in turn, the dollar would continue to be dragged lower.

The issue with commodity prices is the driver of the weakness is still not well understood. While thats the case there is no bottom on the cycle, he said. If you dont know whats driving it down you cant stop it falling.

The dollar has also been weak against the Japanese yen and the euro .

4:35pm: Ah, what a lush field of green we are presented with in our best and worst for today.

At least 10 stocks finished the day up by more than 7 per cent. This rally may not last, but let’s enjoy it while it does!