Defying fears of slowing US growth, Wall Street is trading near record highs in anticipation of support from the Fed and reasonable levels of earnings growth. The S &P 500 was at a record 3014.3 points July 15.

The Fed signalled its tightening cycle had come to an end in January, arresting losses from a savage fourth quarter which delivered the worst December return for the Dow Jones Industrial Average since 1931.

"There are a few things that are supporting markets," said JPMorgan Asset Management global market strategist Kerry Craig.

"Earnings in the US are coming in ahead of expectations, the political wheels are turning on China-US trade negotiations, and economic activity data in the US is showing signs of improvement, raising hopes of better economic growth in the second half of the year."

Wednesday's strong session was propelled by better-than-expected earnings on Wall Street on Tuesday.

Coca-Cola shares rose after reporting a rise in its quarterly profits and sales due to higher demand for its soft drinks, while technology conglomerate United Technologies was positive on its outlook for the year.

Toy maker Hasbro also posted better-than-expected results.


"While there has been some positives for equity investors recently, it's coming from a very low base of expectations and there is still plenty of risk," Mr Craig said.

"There was a very low hurdle for the US earnings season, and the longer-running themes of rising input costs and the steady decline in the number of companies that are beating revenue expectations are still present."

Adding to the macroeconomic puzzle are sustained high commodity prices, speculation of a US dollar intervention, and a sharp contraction in global factory output.

However, potential relief from the ongoing trade war between the US and China also likely underpinned market optimism this quarter, amid news that US negotiators are planning to travel to China next week to resume talks with Beijing.

"While it's encouraging that Chinese and US negotiators will meet in person, this in no way guarantees a favourable outcome," said Mr Craig.

The local sharemarket has soared in the first half of the year, rising more than 19 per cent year-to-date and recording its best first-half since 1991. The next test for equities will be the full-year earnings results due in August.

The sharemarket’s march since its post-crisis low in early 2009 has been reliably led by Commonwealth Bank of Australia, which accounts for more than 500 points of the All Ords’ rally since then. Commonwealth Bank raised $5 billion in 2015 at $71.50 a share; the stock closed at $82.35 on Wednesday.

Westpac Banking Corp, CSL, BHP Group and ANZ Banking Group round out the top five contributors of index gains.


BHP and Rio are still trading below their record highs set during the peak of the resources super-cycle in May 2008 of $46.30 and $123.12 respectively.

Interest rate sensitive stocks Telstra, Transurban, Goodman Group and Sydney Airport are also well represented in the top 20 movers.

The All Ordinaries Index is the oldest index on the exchange and is made up of Australia's 500 largest listed companies.

The benchmark S &P/ASX 200 Index remains just over 50 points shy of its respective all-time high.