Sunset Strip | Aussie market continued the positive sentiment despite falling Iron Ore, rising geopolitical risks and high global market volatility. Recent trading in US shows it has dropped nearly 10% from 2014 high to recent lows while Germany has pulled back over 20% and UK over 13%. Recent downgrades to growth outlook in almost every region will continue to drive global and local investors back to Aussie bonds and equity dividend yields due to the substantial yield premium to the rest of the world. The flow of money will continue to search for the highest yield with the lowest risk....expect it to come back to Australia soon...we feel that is already happening. We continue to feel that RBA is currently trying to curb asset prices (i.e. house prices, equity markets etc.), so that they can cut rates in mid-2015 to stimulate a stagnant domestic economy. Even with stimulus in China and Euro, we see substantial risk with global growth remaining anaemic for atleast another 12mths. Trading idea of the day: CarSales.com (CRZ). Friday's High Risk Pick: Bionomics (BNO). (VIEW LINK)
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