Wall Street markets have posted solid gains overnight after US Federal Reserve chairman, Ben Bernanke suggested the Central bank was prepared to take action as appropriate to promote a stronger economic recovery. Forecasts for US GDP growth of between 1.9% and 2.4% were lower than forecasts made in January, while Bernanke said that US economic data was 'disappointing' and future reductions in unemployment would likely be 'frustratingly slow'.
The Dow Jones Industrial Average closed up 0.6%, the S&P 500 Index adding 0.7% and the Nasdaq Composite Index was up 0.5%.
European markets ended mixed, with the UK's FTSE 100 losing 0.6%, Germany's DAX rose 0.2% while Paris' CAC 40 was relatively unchanged.
The Australian dollar has jumped to a six-week high against the US dollar, buying 103.1 US cents, after the RBA board minutes suggested a fairly stable outlook for the Australian economy and it appears there's less chance of an official rate cut in August.
Commodities markets were fairly flat overnight, with gold currently trading around US$1,583.70.
Futures indicate likely positive start
The ASX SPI futures have closed up 8 points, suggesting the S&P / ASX 200 (Index: ^AXJO) (ASX: XJO) is likely to show early gains this morning.
According to a report in today's Australian Financial Review, handouts to low-income earners have been blown on pokies. Queensland poker machine revenues jumped more than 7% in May, when the first payments went out, and climbed an even bigger 12% in June. Coles, owned by Wesfarmers Limited (ASX: WES), Woolworths Limited (ASX: WOW) and Echo Entertainment Group Limited (ASX: EGP) have all seen their pokies and entertainment revenues rise over the same period. Perhaps the government's $15 billion in handouts could have been better spent.
BHP Billiton Limited (ASX: BHP) has today released its fourth quarter production report. Investors will likely be comparing the results to Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group's (ASX: FMG) results released yesterday. BHP has delivered its twelfth consecutive annual production record for iron ore, while shale liquids and gas assets contributed to a 40% increase in petroleum production over the previous year.
Foolish Takeaway
As my Foolish colleague, Scott Phillips mentioned in a reply to a Motley Fool Share Advisor subscriber's question today, 'remember the tortoise and the hare'. Investing is a long-term race, not a short-term sprint.
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Motley Fool writer/analyst Mike King owns shares in Woolworths and BHP. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
