As a unique Monday morning offering I have created a Switzer Scoreboard that captures the big market-moving stories of last week and the ones that could move stock markets and more this week.
- Wall Street couldn’t make it 9 days in a row but still ended up over 1 per cent for the week. On Friday, the Dow lost 0.35 per cent to 10,741, the Nasdaq lost 0.71 per cent to 2,374 and the S&P 500 gave up 0.51 per cent to 1,159.
- All the most watched indexes — the Dow, S&P 500 and Nasdaq are around18-month highs.
- The fear index or CBOE VIX is at 17 and this is a 22 month low, which is a good omen for investors.
- GE’s share price up six per cent for the week is a good economic sign for the overall US economy because this company is across so many sectors.
- Ford's shares hit a five-year high after Moody's upgraded the automaker's debt and finances outlook.
- US car sales for March are tipped to beat analysts’ expectations.
- US leading indicators rose a paltry 0.1 per cent in February but it’s now up 11 months in a row.
- In politics the Yanks are grappling with their health reform bill and their financial reform bill and both can be market movers.
Away from America
- Euro shares hit a 17-month high.
- Lloyds Banking Group, which was bailed out, said it will return to a profit this year and the UK needs good news such as this.
- The World Bank upgraded its economic growth and inflation readings for China.
- The Greeks could be off to the IMF after their European buddies failed to show them the money. Let ‘em go. The Greeks need a reality check and the IMF can give it.
On the local front:
- The S&P/ASX 200 finished the week at 4,872.2.
- The index went into positive territory for the first time since January 18.
- The index has risen 7.8 per cent in six weeks.
- For Telstra watchers JP Morgan and Citigroup have a buy on the stock.
- By the way, insiders say Telstra wants $12 billion in compensation but the best offer they have seen is $8 billion!
- The money market says an April interest rate rise from the RBA is a 40 per cent chance.
- On the property front, Macquarie’s Rod Cornish says Melbourne’s real estate price rise phase is near tipping point where 36 per cent of household income is used to meet mortgage repayments. Other cities are less vulnerable but a slow down in price rises are being tipped by more experts lately.
- There are 76 mortgage funds where the funds are frozen and the big thaw does not look like it will happen soon.
What’s on this week?
- March 23 US Existing home sales (February)
- March 24 US Durable goods orders (February)
- March 24 US New home sales (February)
- March 26 US GDP (December quarter – final estimate)
- March 22 Car sales (February)
- March 25 Speech by RBA Assistant Governor Philip Lowe
- March 25 Demographic data (September quarter)
- March 26 Speech by RBA Governor to ACI World Congress
Since October our S&P/ASX 200 has been trapped in a sideways range, around 4,850, which rode up to 4,950.7 on January 11. We are now at 4,872 but the case for breaking through the 5000-level looks more believable. Wall Street and the USA need a big news market maker and we will be off to the races.
For advice you can trust, contact Switzer Financial Services.
Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.
Click here to subscribe to the Switzer TV channel on YouTube and keep up to date with all of our shows.