Sunset Strip | Aussie market was resilient and remained flat despite negative sentiment from US after events in Canada
Sunset Strip | Aussie market was resilient and remained flat despite negative sentiment from US after events in Canada. Despite breaking a 7 day positive run, we were encouraged by the Aussie yield stocks holding up the index despite house price worries and miners facing selling pressure. The main buffer in recent years has created a housing bubble where we expect the oversupply of units, falling rental yield and eventual rate rise will expose the economy to substantial risk. Macro prudential tools may slow it down, but the real solution is to remove negative gearing on existing dwellings. This will not be an easy political solution. If we really do not have vested interests in this decision process, it would be simple to promote that negative gearing will only apply to newly built dwellings from a certain date. This will be a new equilibrium that will deliver new construction when there is sufficient demand and also not allow investors to outbid low-income/fist-home buyers. Trading idea of the day: CarSales.com (CRZ). Thursday's Thematic TMT Pick: Telstra (TLS) (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...