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ASX on target for best quarter in 3 years as investors enjoy bailout fatigue

Although the S&P/ASX 200 (Index: ^AXJO) ( ASX: AXJO) is falling today, the ASX is heading for its best quarter in three years.

Leading the way have been information and technology shares including Carsales.com.au (ASX: CRZ) and Computershare (ASX: CPU), and traditionally defensive stocks like Woolworths (ASX: WOW) and Wesfarmers (ASX: WES).

Speaking of Carsales.com.au, we put the Internet darling on our Foolish radar all the way back in August 2011, saying at around $4.70, the company has “an attractive risk/reward profile.” In the past 13 months, Carsales.com.au shares have jumped 56%. Zoom, zoom…

Financial crisis in hibernation

A sense of calm has descended over world markets as central bankers have unleashed their bazooka guns, shooting billions of dollars and euros into the air. Equity investors seemingly believe Ben Bernanke and Mario Draghi can save the day, once and for all, in the process sending the words “financial crisis” into an elongated hibernation.

Remember the “good old days” when markets used to nervously wait on tenterhooks as to whether Greece, Italy, Spain, Portugal or the euro itself would be bailed out of its seemingly insolvable predicament?

They are gone, for now. These days, the market looks ahead and shrugs its shoulders at the prospect of Spain requesting a bailout, widely expected to happen this week.

Nothing too much has changed…Greece is still a basket case, a country already in a deep depression. Spain has masses of debt, masses of unemployed, and little hope of a quick-fix.

Bailout fatigue

Investors clearly have bailout -fatigue. Reuters reports “European equities rose on Friday, briefly testing last week’s 14-month highs, propelled by gains in banking shares on speculation Spain was moving towards a bailout request.”

Going one step further was David Hussey at Manulife Asset Management, saying the Spanish bailout was a formality and that the stockmarket rally will continue.

Raining on the parade is Kate Howitt of FIL Investment Management, who in The Australian Financial Review has warned that October runs the risk of a crash. Just 7 days to go then…

If you are worried about a market crash, you might want to first check out our free report, Read This Before The Market Crashes. It could save you hours of heartache, and thousands of dollars. Click here to request your report now, whilst it’s still free and available.

Bruce Jackson is the Motley Fool’s General Manager. Of the companies mentioned, he has an interest in Woolworths and Wesfarmers. The Motley Fools 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)

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