The S&P/ASX 200 Index (ASX: XJO) is having a great old time on Thursday.
The ASX 200 had risen a whopping 1.6% by mid-afternoon, to more than 7,200 points.
So what's going on? Why is everyone in such a good mood?
Across the Pacific overnight
The primary reason is that overnight the latest consumer price index figures in the United States showed headline inflation has come down to 3%.
That's the lowest rate in two years, and it had the stock markets over there in a bullish frenzy.
The Dow Jones Industrial Average (DJX: .DJI) ended the day up 0.25% and the S&P 500 Index (SP: .INX) closed 0.74% higher.
The most interest rate-sensitive index, the Nasdaq Composite (NASDAQ: .IXIC), gained a fat 1.15% in a single day.
It seems the joy in America has carried over to enthusiasm for Australian shares on Thursday.
Immaculate disinflation
US CPI falling to 3% has been described by Macquarie Group Ltd (ASX: MQG) managing director Viktor Shvets as "immaculate disinflation", according to the Australian Financial Review.
That is, rampant inflation has been tamed without massive unemployment queues or a major economic slowdown.
While we will only know whether a soft landing has truly been achieved months after it has happened, the signs are good so far.
Stock investors rejoiced at this news because it reduces the likelihood that the US Federal Reserve — and other central banks like the Reserve Bank of Australia — will stop the interest rate hike campaign earlier.
The best-performing sectors
Here in Australia, ASX sectors in real estate, information technology, consumer discretionary and mining are leading the way on Thursday.
At the time of writing, S&P/ASX 200 Real Estate (ASX: XRE) has gained 2.98%, S&P/ASX 200 Info Tech (ASX: XIJ) is up 2.4%, S&P/ASX 200 Cons Disc (ASX: XDJ) has lifted 2.33%, and S&P/ASX 200 Resources (ASX: XJR) is trading 2.12% higher.
