SHORT TERM MARKET CALL >>> TAKE PROFIT | • Rate cut outlook already in the price while we expect it to be left unchanged with housing bubble worries • Market getting pushed by global investors to post GFC high level while the buying support may end soon • No rate cut will push currency up and make the global investors take a back seat • Federal government likely to be a lame duck leadership in the short/medium term even with leadership change • EU QE optimism is in the price and reality of the growth downgardes will come through • US market indices have all fallen below 100 day MA again with growth worries after a big year in 2014 • Despite the strength in USD, Spot Gold is holding up due to investors seeing market risk in Europe and Asia • Aussie reporting season will bring higher risk with negative surprises likely to see decent sell offs • The market darling yield stocks like TLS and CBA look stretched with yield dropping to 4.5% • Financials are now near 30 year historical high weight for any major sector (i.e. 45% of the index)
Agree, but the historical trend of RBA suggests that they are likely to change the words towards an easing bias and leave the rate change to Apr/May. But in the longer term I can't see investors staying out of equities for long given that the low interest rates are here to stay.
Could be a strong day today Mathan. If the RBA opens the door for interest rate cuts the yield trade may well kick along regardless of the short term disappointment... Should be interesting to see either way.