Coca prices have doubled in 2 months – did any one notice over the Easter break?
Investors this week noted the iron ore price move below $100 a tonne- a reason to pause and consider the growth outlook for China.
MST Strategist Hasan Tevfik notes “ the global equity bull market is now entering its 18th month (the current Aussie bull market has been going for longer) and the main driver of an increase in share prices has been the improving outlook for corporate profits. We find the global purchasing manager indices have been good indicators of the cyclical component of the profits outlook and our preferred series here has been the US Manufacturing ISM New Orders Index.”
The March release of the ISM New Orders index continued to improve and provides a clear indication that the US profits recovery will endure as well.
Figure 2: Improving profits outlook supported by rising manufacturing indices
S&P 500 12m forward EPS, YoY % Chg
In Australia, the next RBA meeting will be the first week of May, so the consistent question of ‘will they, won’t they’ will continue until early May.
For further money markets insights, Siobhan Blewitt delivers a market run-through daily on ABC Breakfast Radio, 774AM at 0635am. Insights from past weeks finance and economy wrap-ups, information on wealth management strategies and further discussion on technology, go to fraiscapital.com.
