After no rate cut where now for equities? The RBA surprised the vast majority of market experts by leaving interest rates unchanged at 2.25% yesterday

Nicholas Forsyth

Market Matters

After no rate cut where now for equities? The RBA surprised the vast majority of market experts by leaving interest rates unchanged at 2.25% yesterday. The futures market is still factoring in 2% rates in Australia within 6 months. Looking forward, the below scenario should be a little sobering to people that believe you cannot lose buying high yielding stocks: Central Banks around the world are spending $trillions in attempt stimulate their economies, a party that the RBA joined last month. If they fail, we get a recession (bad debts for banks). If they succeed, we get higher rates. Personally I believe that the central banks will succeed and rates will start rising over coming years, the US is expected to raise rates as early as June this year. I believe we will now experience a choppy 2-3 week sideways correction back towards the 5750 area. If I am correct, the market will then resume its rally in the historically strong month of April well over the psychological 6000 level. (VIEW LINK)


Nicholas Forsyth
Nicholas Forsyth
Director
Market Matters

Market Matters is an online investment and share trading advisory service designed for those that want to take their wealth further. We specialise in advice for active share market investors, including those new to the markets or those with a Self...

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