S&P/ASX 200 At 200 Day Moving Average Support

S&P/ASX 200 At 200 Day Moving Average Support As Investors Contemplate Moderate Growth Outlook

By Ric Spooner (Chief Market Analyst, CMC Markets)

The weekend release of economic statistics in the US and China has been confirmed by domestic releases this morning suggesting a steady-as-it-goes, moderate economic growth outlook.

The US economy has created an average 200,000 jobs over the past four months. This is consistent with moderate GDP growth of 2-2.5% but is unlikely to see the Federal Reserve moving to taper its asset purchase program in the near future.

Similarly industrial production and retail sales figures in China are consistent with steady growth rates over recent months while the sharp drop in export and import statistics in part reflects official efforts to crack down on the evasion of capital controls.

This steady-as-it-goes approach was also reflected in domestic numbers released this morning. The NAB business conditions index remains in negative territory and is yet to show any major boost from the weaker Aussie Dollar. Although the demand for housing loans in April was a bit below consensus expectations, the overall picture of recent months is showing signs of a pickup in response to lower interest rates.

The S&P/ASX 200 index has reached a key support level in the form of its 200 day moving average at 4749 and recent news has been good enough to see investors hold the market at this level.

ENDS

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