Sunset Strip > Trading Day Wrap From Blue Ocean 20170511

Local market jumped up on strong oil price and then ran out of puff as stretched valuation and weak commodities weighed on weak sentiment. The best performers were Health Care, Staples and Gold while Telcos, Utilities and Discretionary Retail were the worst. Budget confirmed that the only option is infrastructure boom…boom cycle > resource to housing to infrastructure…don’t get too excited….it’s $75b over 10 years and most of the big ticket items are already announced projects recycled to sound better…after 100+ quarters of recession free run, each boom cycle is delivering diminishing overall wages, number of jobs and tax revenue. The government is back loading the budget with bad news like a footy team managing salary caps…expect an early election in 2018 before taxes kick in. Australia is even more open to global competition and growth outlook into the next few years is unlikely to beat recent past…while budget is expecting better growth for the next three years…stop believing in Santa a while ago!!!

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