Bargain Hunters In Discretionary Stocks Were On The Money
CMC Markets | Oct 11, 2017 13:48
Originally published by CMC Markets
It’s been a good few days for the S&P/ASX 200 index and bargain hunting in consumer discretionary stocks has been one of the key drivers. The 200 index is up 1.8% from its low last Thursday. The consumer discretionary sector is up 3.4% over the same period.
This morning’s release of Westpac’s monthly Consumer Sentiment index suggests bargain hunters may have been on the money. Pessimism following the poor retail sales data last week looks like it created an opportunity.
The Sentiment Index returned to its long run average level of 101.4 in October. This follows 10 consecutive readings below 100 where pessimists outnumbered optimists.
Expectations about both the economy and family finances for the year ahead have improved. There were also gains in the sub index measuring views on whether now is a good time to buy a major household item.
Westpac noted that concerns over rising interest rates have eased while the strong improvement in the job market was also helping. The rise in confidence was particularly strong for trade workers indicating ongoing strength in residential construction.
While this improvement is welcome, it comes against an overall background of low wage growth and high household debt that may keep improvements in consumer spending to moderate levels.
After a good week, the Australia 200 index is now approaching chart resistance. Short term traders may soon be thinking in terms of profit taking and position reversal.
Get The App
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.