Will news from Asia carry the day? (ISFM) (01-09-2010)

The BBC correspondent in Sydney this morning was saying that Australia’s politics may be having a soap opera year, but it's growth took a surprising upward swing, no doubt due to the strong demand of raw materials from powerhouse China. Most world stock markets responded positively to this news, rising on the optimism.

Until the previous day’s close, growing fears that the U.S. recovery is slowing down had been affecting sentiment adversely, so this breath of fresh air has been particularly beneficial. Investors are eyeing data coming in the next few days, to decide. Among the key information is the critical U.S. jobs report at the end of the week.

Earlier this morning, China reported a rise in manufacturing activity for the month of August while the better than expected second quarter growth in Australia helped soothe some concern over the global economy.

In Europe, markets rose after the strong results reported by Vivendi, while a number of sectors were also gaining, led by financials and miners. The rally has been largely due to better than anticipated economic data from around the world.

The monthly jobs survey from the ADP payrolls firm showed a drop of 10,000 jobs were a rise of about 20,000 had been expected; however, fifteen minutes before the open on Wall Street, futures seemed to be riding higher on the news coming from Asia. Shortly after the open, however, investors will be mulling the monthly purchasing managers' index from the Institute for Supply Management, which is expected to have fallen.

Source: ISFM