Markets rebound after volatile week

15.04 AEST, Thursday 26 July 2012

Markets rebound after volatile week

By Ben Taylor (Sales Trader, CMC Markets)

Our market has rebounded today after a relatively volatile week of trading. The lack of economic news meant that European headlines mixed with company specific announcements guided our market today.

Caltex shares jumped today following an announcement it will be closing its Kurnell refinery in Sydney in the second half of 2014. The closure is expected to further reduce Caltex costs by axing jobs and importing refined oil products. Opponents of the move say that such a decision leaves NSW at the mercy of global energy markets where any escalations of problems could cause petrol prices to spike.

Qantas shares have also rallied hard today following its confirmation that it is in alliance talks with other airlines.

Speculation overnight that the European Stability Mechanism may obtain a banking licence had the markets covering its shorts. The implication that the ESM would be able to leverage up via loans through the ECB had the market excited.

While the speculation might be just that there is however a growing expectation that we are getting closer to further rounds of global stimulus. Last night’s US housing data was just another nail in the coffin for the United States economy, talk that the Fed will act sooner than later may be the backstop needed to stop the rot.
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