The Rum Rebellion analyses the Aussie stock market from a perspective you won’t get in the mainstream business pages.
The Australian Stock Market (ASX) is heavily influenced by the banking sector (financials make up around one-third of the index’s value) and the resource sector.
The ASX also frequently moves based on events in the US and Chinese stock markets. In the US, there are three main indices. These are the S&P 500, the Dow Jones Industrial Average (DJIA) and the Nasdaq Composite. The S&P 500 is an index of the top 500 companies in the US, the DJIA includes 30 of the largest and most influential companies (generally blue-chip, dividend stocks), while the Nasdaq is the tech stock index and includes big names like Intel, Google, Facebook, Apple and Amazon.
In addition to the US markets, we look at Chinese economic data to get a gauge on which way the Chinese economy is heading. This weighs heavily on the fortunes of our resource sector, in particular major miners like FMG, Rio Tinto and BHP, who rely on Chinese demand for iron ore. Iron ore accounts for upwards of 20% of Australian exports, so this is a key bellwether for us.
We also look to other major markets, such as Europe and Japan, who are both important trading partners. With loose monetary policy, European and Japanese stock markets can act as leading indicators for global economic growth (or lack thereof).
While all of these factors are obviously important, there is plenty of stuff going on ‘under the hood’, so to speak. We seek to highlight these opportunities, as well as alert you to the danger signs.
To do this, we use charts in our analysis. A picture is worth a thousand words and a chart contains a wealth of information about a stock, sector or index as a whole. So on the days that we’re talking about stocks or stock markets, we’ll throw in a few charts to show you what we’re talking about. This is because charts help you to cut through the noise and opinions, and show you what is really going on in the markets.
By following the stock market updates in this section, you can latch onto emerging market trends and stay up to date on the latest announcements affecting share prices.
How does AAPL stack up? Based on 2020 earnings forecasts, AAPL trades on a price-to-earnings ratio of 20.4 times. This is ‘cheaper’ than both WOW and WES. Moreover, AAPL only pays out 25% of earnings…
Could the Saracen share price go up when the company’s shares start trading? Saracen Mineral Holdings Ltd (ASX: SAR) announced yesterday they’ve gone into a deal to acquire a 50% stake of the Super Pit…
People say that stock prices are irrational. I disagree. I believe the stock market is reacting rationally to irrational central banking policy. It doesn’t leave much room for unexpected risks. I would wager that none…
Things are looking very bubbly: stock market, property. The chart shows the different phases of a bubble. It’s typical of bubbles to have a euphoria and even delusion phase, before the collapse. But there isn’t…
The road to hell is meant to be paved with good intentions. But nothing good ever comes from deception. Based on 140 years of market data, the current PE10 reading is almost 80% ABOVE the…
Officially, the US market is no longer fair value. Unofficially, historical valuation methods tells us the US market is well beyond stretched…it’s travelled into rarefied (and terrified) territory. By any measure, Wall Street is much…
The age of financialisation is all about enriching the managerial class. The story of US semiconductor company Texas Instruments Inc [NASDAQ:TXN] and their stock buyback program. Management were busy…
We’re soaked to our bone in debt. Total government debt is now just over $1 trillion. (Let’s not talk about it, but household sector debt is nearly $2.6 trillion.) What have we got in return…
Reality is different from the theory. Which is why the concept of quantitative easing (QE) is so appealing, but ultimately so useless. Central banks, in the case of QE, create money by monetising existing bank…
We look at Regis Resources’ latest quarterly and the latest uptick in the gold price for clues as to how the Regis Resources share price might perform in the coming months.