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Building on our comments yesterdayt that markets would rally back just as hard as they initially fell on Egypt, Clifford Bennett of Herston Economics believes there is almost no reason on the horizon for any further declines. Perhaps the last of the pullbacks in equity markets, commodities and the Australian dollar have now been seen. Expect aggressive rallies in all asset classes from here.
All the economic news that matters, is good. China is performing strong, USA and Europe are improving all the time. There is no doubt after the great rally we have seen from last year that a correction was due, but the fear mongers have been served a great opportunity with Egypt, and are making the most of it. The thing is, I don't see China slowing because of a change of government in Egypt, i really don't, buy this dip, its a gift comments Clifford Bennett of Herston Economics.
Equity markets continue to climb, gold may well have bottomed for the year, and the RBA is sidelined. Clifford Bennett of Herston Economics talks about why higher food prices do not mean rate hikes, and the outlook for Australian equities remains very favourable.
This rally is just the start of something much bigger, says Clifford Bennett of Herston Economics. While Gold and Oil speculators unwind their holdings, the real world is experiencing a rapid economic expansion of the likes we have never seen before. The dominant risk in equity markets is upward acceleration, no correction in sight. The Australian dollar has spent enough time near parity, time to move up.
The US has stitched up some good export deals to China, so now we should get less of the US research houses fictionally suggesting China is a bubble. US, European and China/Asia outlooks all positive at the same time as we expected, and this should see markets accelerate sharply higher this week, Clifford Bennett of Herston Economics said.
The Dow Jones and US markets have been very firm over last couple of trading sessions as well as the economic data overnight and existing home sales were better than expected. US jobless claims dropped down approximately 400,000, with a lower sustainable trend showing the US economy is looking better.
Any pullback in the Australian market today is an extraordinary opportunity to again buy for further market gains into the week end. Concerns overnight regarding UK employment, US housing starts, Apple, and Goldman Sachs, all of little relevance to the Australian market place. Stocks like Fortescue continue to point the way, and the Australian dollar is heading to 1.03 1.08 this year, according to Clifford Bennett of Herston Economics.
Markets over reacted to China slowing concerns, and a tough year ahead for Queensland, creating the prospect for a robust recovery in prices through the rest of the week, according to Herston Economics Clifford Bennett.
Expect strong markets this week, with the Australian market unlikely to wait for the US to come back from the Martin Luther King Jr day holiday. Us industrial production gains in December confirm the resilience and broad based nature of the US recovery.
European nations continued to easily sell their bonds at competitive yields to recent market rates, confirming there is no sovereign debt crisis, according to Clifford Bennett, chief economist at Herston Economics. The US dollar continued its decline, oil remained bid, and Sterling the other market favourite of the week, continued to make strong gains.
