The Overnight Report: Missiles Retracted
By Greg Peel
The Dow rose 140 points or 0.9% while the S&P gained 1.0% to 1671 and the Nasdaq added 1.2%.
Bridge Street had a solid session yesterday but it had little to do with the election. The election result was all but known last week if not before, and if anything there may be some concern over a Senate which, through apparent manipulation, has become a peanut gallery. ABC radio/TV revealed last night that the last word on major legislative changes proposed by the Coalition may come down to the approval of a guy who got in because his party was the "A" box above the line, who supports guns for all and will veto anything involving increased tax; a footballer who has no opinion on anything other than grassroots sport; a footballer who, perhaps like all of us, would like to avoid a "double disillusion", and a guy who likes to dak his mates on camera.
Looking forward to some maiden speeches.
Bridge Street did little yesterday until the Chinese inflation data came out, which showed a 2.6% year on year CPI rise as expected, down from 2.7% in July. The PPI fell again, by 1.6% year on year, better than a 1.8% expected fall, and much better than the 3.6% annual rate of deflation a year ago.
The slowing in the rate of PPI deflation further supports the view the Chinese economy is turning around from its slowdown, while the stable CPI suggests no reason for the government to tighten policy further. Beijing may still look to tighten credit access in the property market but incentives for infrastructure and public housing construction provide a balance.