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Will the ASX 200 smash its pre-GFC record high this morning?

Investors are on the edge of their seats this morning with the S&P/ASX 200 (INDEXASX: XJO) index set to open higher after closing just 3 points shy of its pre-GFC record high.

Why could the ASX 200 break its record high?

The United Kingdom’s FTSE 100 (FTSE: UKX) index climbed 1.82% higher yesterday to close at 7,686.61 – an 11-month high for the key index after ongoing Brexit and political tensions have weighed on equities.

According to the Australian Financial Review, SPI futures were up 28 points to 6,786 at 4:23am AEST this morning, with all signs pointing to a positive start to the day for the ASX.

The ASX 200 rose 0.48% yesterday but a late sell-off in the Financials sector in particular saw the ASX fail to close at record highs, with its current 6,825.8 points just 3 points shy of its 2007 record high.

Despite briefly hitting a new all-time high of 6,851.5 during the day’s trade, the ASX continued its bullish start to the year – the best since 1991 – as tech and telco stocks climbed higher throughout the day.

The Afterpay Touch Group Ltd (ASX: APT) share price was a standout performer yesterday after the company appointed a specialist auditor as part of the ongoing review of its financial crime compliance, closing 4% higher at $27.18 per share.

Fellow ASX growth favourite Appen Ltd (ASX: APX) also gained 3.4% in yesterday’s trade to close at $31.42, while Telstra Corporation Ltd (ASX: TLS) climbed 1.6% to $3.90 per share – briefly hitting a new 52-week high of $3.91 per share in the process.

What does this mean for the August reporting season?

While the ASX continues on its bullish run, it’s an interesting time to be investing in the market given the so-called “confession season” is in full swing ahead of the August reporting season.

Companies traditionally use this time between the 30 June end of financial year and start of results season to disclose material earnings items and updates, so as to limit the volatility of stock moves when they do announce results in the next month or so.

So, while the ASX 200 might be set to hit a new record high, I’d be wary of investing in growth stocks in particular ahead of seeing the cold, hard numbers in full or half-year results, given the potential for some more disclosures throughout the week.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO and Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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