Sunset Strip | Aussie market popped on RBA cut to deliver 9th straight positive day despite global and local growth worries
Sunset Strip | Aussie market popped on RBA cut to deliver 9th straight positive day despite global and local growth worries. RBA has removed the period of stability outlook and replaced it with expect more cuts while currency remains above fundamental value due to below trend growth to last longer than expected and higher unemployment than expected despite expecting petrol prices to deliver substantial savings to the household. RBA is basically saying that the local economy is going to struggle substantially and we have now joined other major regions/countries in currency war to maintain competitiveness. Given that the currency war has been going on for years, RBA must see substantially problems coming to make this move. This does not change our long term view of market running to 6500 by 2016 on dividend yield thematic. But the short term profit take call yesterday was to cover the risk of rates remaining stable. Equity markets will continue to drive higher on yield thematic and M&A on cheap debt!!! (VIEW LINK)
Over 25 years’ experience in the finance/tech industry. Mathan has worked extensively in all parts of the finance sector (i.e. County NatWest, Citi, LIM, Southern Cross, Bell Potter, Baillieu Holst and Blue Ocean Equities). Currently Founder and...