Waiting for the sun
August 13th 2007 11:12
Given the precedent set by the financial markets over the past two weeks, the recovery by the market today is by no means an indication that all is over. The benchmark ASX S&P 200 index on Monday staged 1.3% higher after last friday biggest one day fall since September 11, 2001.
Signals are mixed for the short term as time is needed to know the real damage caused by the US credit crunch. The magnitude of the issue, however, at this point of time is not rather clear, with experts conflicting on the real depth of the credit implosion.
As was seen, it took nearly two weeks for Europe to surface to reveal the damage imported from across the Atlantic.
Locally in the face of strong earnings growth by companies there is prospect of another rate rise, possibly in early 2008, as inflation could continue to rise as forecasted by the Reserve Bank of Australia. It is an indication that Australian economy is chugging ahead strongly and will continue to do so in addition to the commodities boom.
Concerns of a global market melt down is over the top or simply over rated as analysts and investors took comfort at the actions of the major central banks around the world to inject liquidity to avert any event of credit dry up.
The current sentiment is akin to people seeking shelter from the heavy rain and winds until all is over, unless you are willing to take the risk to dash across and to be drenched or for the worse, get blown away.
The sun has to come out after the storm and it is only a matter of time.
Perhaps the sun is what the International Monetary Fund said last Friday, "The fundamentals supporting strong global growth remain in place."
Signals are mixed for the short term as time is needed to know the real damage caused by the US credit crunch. The magnitude of the issue, however, at this point of time is not rather clear, with experts conflicting on the real depth of the credit implosion.
As was seen, it took nearly two weeks for Europe to surface to reveal the damage imported from across the Atlantic.
Locally in the face of strong earnings growth by companies there is prospect of another rate rise, possibly in early 2008, as inflation could continue to rise as forecasted by the Reserve Bank of Australia. It is an indication that Australian economy is chugging ahead strongly and will continue to do so in addition to the commodities boom.
Concerns of a global market melt down is over the top or simply over rated as analysts and investors took comfort at the actions of the major central banks around the world to inject liquidity to avert any event of credit dry up.
The current sentiment is akin to people seeking shelter from the heavy rain and winds until all is over, unless you are willing to take the risk to dash across and to be drenched or for the worse, get blown away.
The sun has to come out after the storm and it is only a matter of time.
Perhaps the sun is what the International Monetary Fund said last Friday, "The fundamentals supporting strong global growth remain in place."
| 70 |
| Vote |
subscribe to this blog