ASX200 Index

The ASX200 punched above 8700 for the first time on Friday and ended up getting fairly close to 8800, the bottom end of our target range into Christmas. As we’ve said before, if the banks, large miners and CSL can advance as one for the first time in 2 years, our 8800-9000 target area for the local index may prove too conservative. Valuations are elevated, but the markets are currently embracing the “Goldilocks” scenario of declining inflation and interest rates, while the economy remains resilient. At this stage, we feel the bulls will continue to control until we see signs of economic deterioration.

• On Saturday morning, the SPI Futures were calling the ASX200 to open down 0.6% but in its current mood, this is likely to be another short-term buying opportunity.