The story doing the rounds to fill up media space was that stock lovers were turning their attention northward - to Asia - and that’s why our stock market had the worst day this year, losing 1.6% on Wednesday.
And it was the worst day since Donald Trump shocked the world with his election win last year.
For good measure, the weaker Aussie dollar was thrown in as an excuse, but it’s still over 75 US cents.
One of my old students now at Citi, Tony Brennan, is selling this Asia-is-better-than-us story, while some fund managers are supporting the lower-dollar thesis, saying it’s being driven by offshore sellers.
But in truth, no one really knows what’s going on right now, though it seems apparent there’s not a big appetite to sell off.
So let’s do a wrap of what is explaining this stock market that doesn’t want to go up, but is not keen to jump on board a possible Trump dump.
The only conclusion the data I’ve presented shows is that there are no compelling reasons to buy madly but you’d have to be a very negative person to want to dump stocks right now.
The simple fact is we’re waiting for a Trump pump or a Trump dump of stocks if Congress stumps the Trump tax plan.
Donald Trump. Source: AAP
Underpinning all of this is a virtual army of dip-buyers out there who rush in every time the market overreacts.
I’ve noticed every time my SWTZ dividend growth fund has a bad day, the inflow of support the next day is actually very solid.
You might not like him but if Donnie is impeached it will hurt stocks and if he gets his tax plan up our S&P/ASX 200 Index will beat the 6000-level, so that would be a 5.2% gain plus about 2.5% for half a year of dividends - and then throw in some franking credits.
As I’ve implied, if the market wants to concentrate on the negatives and ignore the considerable positives, then I’m up for making some money.
The ASX is typically responsive to global recoveries, such as the one happening now.
But the Australian market is currently showing few signs of a synchronised up-swing, Citi's analysis noted.
Economic indicators like strong business conditions and employment growth are being balanced by weak household sentiment and spending in Australia, providing a relatively complex local picture for global investors to digest.
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