The Guru News Is Now A 30 Second Read , Property Market Softer With Banks Making Move, New Financial Fitness Survey Pop Up.
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To the property market and on Saturday I went to see what impact the 4 major bank rate increases effective November 20th had on the market in the south east suburbs in Melbourne. .
I looked at properties, in Oakleigh, Murrumbeena, Carnegie and South Caulfield as Saturday was ‘Super Saturday’ with nearly 1400 auctions. The reason the day is so popular to sell is that vendors have a 4 week opportunity where there is no football, no major cricket and the horse racing carnival is not at its peak on top of that at the peak of spring houses do present well. What I found on Saturday was a change from the banks move, I feel it is the first time in a long time that vendors needed to have a reality check as houses started to pass in. This weekend is very quiet for auctions as it is the cup weekend, however with Macquarie Bank this morning lifting its variable rate as well for home owners and investors the heat could be coming out of the booming property market.
To global markets and last week we had Japanese export growth (slowing), China on Saturday cut their benchmark interest rate… again… and the European Central Bank (ECB) hinted that further quantitative easing is possible.
All the above suggest that “bad news is good news” and the market may run, leading into Christmas. The growth has come from the technology and energy sectors that have been the main drivers of the US rally since August’s sell off:
Central-bank stimulus and strong earnings from the largest technology companies combined to give U.S. stocks their fourth straight weekly gain and propel the Standard & Poor’s 500 toward its best month since 2011.
The S&P 500 has jumped 11 percent from its summer low, with the surge in October led by commodities producers and technology shares, the very groups that fueled the August selloff. The gains put U.S. equities back in the black for the first time since the correction, and left the benchmark index just 2.6 percent from its all-time high.
“Stocks are back,” said Robert Pavlik, who helps oversee $9.1 billion as chief market strategist at Boston Private Wealth. “We’re back on track as far as a cheap money, quantitative easing, risk-on trade is concerned.”
U.S. equities rally 11% from August low
The S&P 500 rallied 2.1 percent in the five days to 2,075.15, for a fourth weekly gain that is the longest streak of the year. The gauge closed at the highest since Aug. 19. The Nasdaq 100 Index surged 4.2 percent for its best week since July.
Equities got a boost during the week from central banks. On Friday, the People’s Bank of China cut interest rates and banks’ reserve requirements to support a slowing economy. That announcement came a day after the European Central Bank signaled it will bolster stimulus if needed.
Meanwhile, the earnings season suddenly came to life. More than 100 companies in the S&P 500 reported for the week, initially providing mixed messages until results from three tech giants late Thursday sparked a broad rally. Microsoft Corp., Google parent Alphabet Inc. and Amazon.com Inc. added more than $80 billion in combined market value the next day as quarterly profit topped estimates. A group of tech stocks in the gauge surged 4.6 percent in the week to a 15-year high.
The combination of earnings growth and central bank stimulus — two of the biggest supports for equities during the 6 and 1/2 year bull market — provided an accelerant to stocks in the midst of recovering from the first correction since 2011. All 10 of the major groups in the S&P 500 have rallied since Aug. 25, led by gains of more than 16 percent for technology and energy stocks.
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All Ordinaries 5388 – (52w H5963 L4936)
Dow Jones 17646 – (52w H18351 L15370)
AUD/USD $0.73 US Cents
Oil ($US) $US 44 WTI Crude
Petrol In Melbourne? $1.15
Melbourne Clearance Rate: There were 1352 auctions reported to the REIV this weekend, 71% selling.
Quote/Thought Of The Week:
Next weekend expect around 400 auctions as people enjoy the long weekend.