The ASX 200 (ASX: XJO) share market is having a strong day, it’s up by 1.4% to more than 7,100 points.
It’s not often that the ASX 200 rises by that much in one day.
US inflation causes a boost
The US share market had a strong performance overnight, with the S&P 500 rising by 1.9%, one of its best days in months.
According to the latest data, CPI inflation was flat last month, against expectations of a gain of 0.1% month on month. The annual increase was 3.2%. After stripping out food and energy prices, core inflation was 4%, it was also a bit slower than expected and was the slowest increase in two years.
After seeing these numbers, the market guessed that it may be good enough for the US Federal Reserve to be done with interest rate increases.
The 10-year US government bond yield dropped below 4.5%, after reaching above 5% in October. A lot of assets are priced against bonds, so it’s helpful for asset prices that the bond yield reduced.
It was reported by CNBC that we just learned Chinese retail sales and industrial data grew faster than expected in October, which was a positive.
How are ASX 200 shares responding?
The ASX 200 share market typically follows on from what the US stock market does if there’s major movements up or down.
Looking at some of the movers:
The BHP Group Ltd (ASX: BHP) share price is up 2%.
The Xero Limited (ASX: XRO) share price has climbed 2.3%.
The Charter Hall Group (ASX: CHC) share price is up 8.8%.
The Allkem Ltd (ASX: AKE) share price is up 6%.
The WiseTech Global Ltd (ASX: WTC) share price is up 5%
And so on.
Remember, plenty of these ASX shares are below their all-time/COVID highs, they’re still down. But, the market is feeling a lot more positive about the interest rate situation in the US compared to last week.
However, closer to home, Australian wage growth figure just broke a quarterly record according to the ABS. Annual wage growth was 4% and in quarterly terms it was an increase of 1.3%.
Final thoughts on the ASX 200 share market
It’s normal for the share market to see both pain and excitement, and this is just another day. But, it goes some way to help shareholders.
I still there are plenty of bargains out there, particularly small caps, but they’re not as cheap as they were before.