You have a binary outcome in a world of financial repression. You can go full ‘risk-on’ and buy the most aggressive growth stocks and momentum plays…
The Rum Rebellion analyses the Aussie stock market from a perspective you won’t get in the mainstream business pages.
The ASX — what factors make it go up and down?
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).
Stock Market News and Updates — Our Approach
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.
About 20 years ago, British Petroleum decided to rebrand. They shortened their name to BP and started using the tagline ‘Beyond Petroleum’. BP wanted to change their ‘big oil’ image and go greener.
Shrewd real estate investors look for properties they can buy for about eight-times gross rental income.
Thanks to the fall in long-term bond yields in recent weeks, investors are back buying ‘growth’ stocks. Lower bond yields mean a lower discount rate, which means higher valuations for stocks with distant growth prospects.
The crypto sector has lost about US$1.3 trillion since the beginning of May. Bitcoin itself has been cut in half.But both colleagues and dear readers insist that the crypto class still has value…
Feel free to catch up on a couple of our most popular articles over the last few months, plus a video we’ve recently uploaded to our YouTube channel…
Banking Stocks Investing Outlook – I recommended taking some money off the table in some banking stocks. We’ve been in that rally since October last year…
In the typical AMC multiplex, you may have the choice of 8–12 movies. On Netflix, Amazon, et al, you have thousands to choose from.
The market had a panic about the effect of inflationary pressures on commodity producers in particular.