Seeking calmer waters
August 8th 2006 15:32
The hoo haa anticipitation of the rate rise is well over with its sentiments clearly diluted in the market and a new up and running fresh focus on corporate earnings the state of the US economy and resource prices. After the zig zag movements resulting from the rate anticipation, it is time for some less "adventurous" journey.
The market opened the week positively with yesterday performance of 1.2% rise for the ASX S&P 200 benchmark index. The lead was sourced from banks especially Commonwealth Bank (CBA) contributing to 30% of the market rise. Now it is clear that the run up period to the rate rise was actually a good opportunity to take in banking stocks at a bargain as banks such as CBA usually reports healthy dividends. It was a positive expectation play based on fundamentals.
The medium term outlook for the market would probably dance to the tune of the US economy. If the Feds maintain thier rates, good news for the local bourse. The tightening cycle slowdown in the US was not well received on the perception that the pause was just temporary, but the recent labour data shows that the unemployment rate is up and it seems likely for the interest rate to be maintained in the near future. Back to the local front, interest hike looks possible at end of the year although the general sentiment seems to have forgotten about it now before further economic data pops up. Folks, remember to do your part for a jolly interest hike free Christmas
Meanwhile the mini portfolio, set up last Friday, lost $13.50 from $8,136.50 (incl. of brokerage fee of $30 per stock) on Tuesday following a gain $40 on Monday. Current market value of the portfolio stands at $8,123.
The market opened the week positively with yesterday performance of 1.2% rise for the ASX S&P 200 benchmark index. The lead was sourced from banks especially Commonwealth Bank (CBA) contributing to 30% of the market rise. Now it is clear that the run up period to the rate rise was actually a good opportunity to take in banking stocks at a bargain as banks such as CBA usually reports healthy dividends. It was a positive expectation play based on fundamentals.
The medium term outlook for the market would probably dance to the tune of the US economy. If the Feds maintain thier rates, good news for the local bourse. The tightening cycle slowdown in the US was not well received on the perception that the pause was just temporary, but the recent labour data shows that the unemployment rate is up and it seems likely for the interest rate to be maintained in the near future. Back to the local front, interest hike looks possible at end of the year although the general sentiment seems to have forgotten about it now before further economic data pops up. Folks, remember to do your part for a jolly interest hike free Christmas
Meanwhile the mini portfolio, set up last Friday, lost $13.50 from $8,136.50 (incl. of brokerage fee of $30 per stock) on Tuesday following a gain $40 on Monday. Current market value of the portfolio stands at $8,123.
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