It seems like such a long time since the end of February, when global equity markets fell by around 3% across the western world, and by larger amounts elsewhere, including a 9% fall in China.
Yet already the All Ordinaries Index is within a sniff of recovering all of that lost ground. As of Friday, the All Ords had climbed to 5,978.8, a rise of 0.7% for the week, and leaving it only 43 points, or less than 1% away from the all time high reached on 26th February.
By the first week of March, the All Ords had managed to lose all of the gains that it had made for the year so far, yet four weeks later the index is showing a gain of 5.9%. Not bad by anyone's standards.
On Wall Street it was a different story, as US investors and analysts remained cautious about the prospects for the US economy. The market appears to be stuck between two trains of thought. One is the camp that believes the economy is moving along just fine and that there will not be any need for an interest rate rise; in fact they believe there could be a cut, though they believe a rise is more likely.
The second camp believes that the US economy is going to slow, which could mean that an interest rate cut is on the cards. Although not if inflation continues to press on the Federal Reserve's nerves.
Whatever happens, the US market appears set for a similar stalemate to the one it faced during 2004/2005.
This is unlike the Aussie market, which seems to barge everything aside in search of ever higher share prices.
Kris Sayce
The Daily Reckoning Australia
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About the Author
Kris Sayce began his financial career in the City of London as a broker specializing in small cap stocks listed on London's Alternative Investment Market (AIM). At one of Australia's leading wealth management firms, Kris was a fully accredited adviser in Shares, Options and Warrants, and Foreign Exchange. Kris was instrumental in helping to establish the Australian version of the Daily Reckoning e-newsletter in 2005. In late 2006, he joined the Melbourne team of the leading CFD provider in Australia.
