Rates To Stay At 2% Tomorrow, Will Mergers & Acquisitions By Foreigners Save Us?, US Unemployment At 5.1%

Our market has underperformed global markets for the last few years. The falls in the banks, in particular CBA and the big miners have been a huge factor in that. However in Australia merger & acquisitions (M&A) activity has reached US$109.6 billion so far this year, a 31.0% increase in deal value from the first nine months of 2014. Activity was most prevalent in the non-bank industrials and materials sectors.

Foreign acquisitions of Australian companies totaled US$36.5 billion so far this year, a 27.8% increase compared to the first nine months of 2014.

Inbound M&A Increases 27.8% – Highest since 2011

Source: Thomson Reuters

So where to from here? What weneed to attract to our market and our country is exciting, high-growth companies such as local software success story Atlassian to list on the ASX not in the United States as is reportedly the case.So can takeover activity continue to prop up our equity market indefinitely?The answer of courseis no, but it is a start to recovering our economy.

Overseas and the U.S. economy added only 142,000 jobs in September, well off the 200,000 jobs expected by economists. July and August’s reports were revised down by a combined 59,000 jobs. The unemployment rate was steady at 5.1%, but the participation rate fell in the month. Hourly wages and hours worked slipped slightly. Wages are now up 2.2% year-over-year.

With little to nothing happening the market today traders will be anxiously awaiting tomorrows rate decision from the RBA, however with the governor stating previously that he was “pretty content” with current policy, rates are expected to remain at its present record low of 2.0%.

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