by Kris Sayce on October 30, 2008
Yesterday the US market soared in the last few minutes of trading. Today it choked in the last few minutes. Everyone is always looking for a reason why the market does certain things.
The main reason it went up yesterday was because more people were prepared to buy at the prices quoted. The reason it dropped late on today is because more people were prepared to sell at the prices quoted.
The 0.5% rate cut by the US Federal Reserve was already built into stock prices so it isn’t entirely surprising that there was little further upside…
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by Kris Sayce on August 21, 2008
The Reserve Bank of Australia (RBA) has potentially got itself into a pickle. However, from a cosmetic, crowd pleasing perspective it will not be an unpopular one in the short term. In the long term, that could be a different story.
The RBA has recently made intentions clear that it will reduce interest rates at its September meeting. Therefore interest rate markets have now built in at least a 0.25% cut, although some commentators are even predicting a 0.5% cut based on nothing more than the fact that the RBA has cut by at least that amount on the previous two occasions since 1996 following a period of monetary tightening.
What’s the problem with that you may ask. Surely the Westpac/Melbourne Institute Leading Index – released yesterday – indicates that “the likely pace of economic activity three to nine months into the future, was 2.0% in June, well below its long term trend of 3.9%.”
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