Local blues or better news?

Better news could outweigh local blues on Australia’s share markets this week.

Worries about bad debts, particularly at Westpac, dampened the local market last week, causing the All Ordinaries to fall by 3.6 per cent, over that time.

But the New York stock exchange, was moving upwards  again towards the end of last week.  It chalked up a rise of 155.91 points on Friday, to reach to a new high of 9,505.96.

That development was based, largely, on reports that the global economy may now be coming out of its worst recession since World War II.

Bloomberg, for example, reports that sales of established homes in the US jumped in July to the highest level since July 2007.

“There is no question that the global economy is healing and emerging from recession,” Harvard economist and former chief IMF economist, Kenneth Rogoff said in a Bloomberg television interview.

Australia’s economic news, over the past few days, has also been mostly good.

As the Treasurer, Wayne Swan, points out in his weekly economic note Australia has just signed its biggest resource export deal ever.

That is for the sale of liquefied natural gas from Western Australia’s Gorgon project.  That sale, to Petrochina, is likely to be worth some $50 billion over the next 20 years.

Mr Swan says, also, that Gorgon, itself, will be the biggest single investment ever made in Australia.

This announcement is particularly significant, as it came while the global economic crisis still gripped Australia, at a time when investors, particularly, are extraordinarily cautious.

However, Mr Swan also noted that this caution might be easing. He cited the respected Dun and Bradstreet survey, which rated Australia as one of the safest places in the world to invest.