ASX vs. DOW

[squeegee]

I am a very angry young man these days, and am a hater of the current Aust govt. Anyway, all that aside, could someone please explain to me WHY our markets are trailing the US markets so poorly. Considering the joys of our economy and the woes of the US! And the AUD actually makes the situation look better than it really is!!!!!!!

These days I have become an investor that occassionally trades. My portfolio is down about 20% from break even.

Perhaps my maths maybe wrong.....these % are "circa"

Dow only needs to go up 13% to reach its ALL TIME HIGH. ASX needs to go up 67%!!!! 67% !!!!!!!
Dow is up 86% from GFC lows. ASX is up a pathetic 29% from GFC lows.
Dow is now just 2% off its 2 year high. ASX is 22% off its 2 year high.

Looking at a time line it all seemed to go pear around Aug or Sept 2010.....and I cant find any historical news sites to suggest what was going on around this time to KILL OUR MARKETS.

Anyone have any suggestions? Grealty appreciate as I wish to understand.

 

[notting]

Re: ASX vs DOW

Anyone have any suggestions?

The ausi dollar is twice as expensive as it used to be against the US$! Hence the value discrepancy you speak of is not really there.

 

[Billyb]

Re: ASX vs DOW

No one can know why although there can be many theories. Just give it time. There will be plenty of money to be made from the ASX too, just not yet.

 

[skc]

Re: ASX vs DOW

I am a very angry young man these days, and am a hater of the current Aust govt. Anyway, all that aside, could someone please explain to me WHY our markets are trailing the US markets so poorly. Considering the joys of our economy and the woes of the US! And the AUD actually makes the situation look better than it really is!!!!!!!

These days I have become an investor that occassionally trades. My portfolio is down about 20% from break even.

Perhaps my maths maybe wrong.....these % are "circa"

Dow only needs to go up 13% to reach its ALL TIME HIGH. ASX needs to go up 67%!!!! 67% !!!!!!!
Dow is up 86% from GFC lows. ASX is up a pathetic 29% from GFC lows.
Dow is now just 2% off its 2 year high. ASX is 22% off its 2 year high.

Looking at a time line it all seemed to go pear around Aug or Sept 2010.....and I cant find any historical news sites to suggest what was going on around this time to KILL OUR MARKETS.

Anyone have any suggestions? Grealty appreciate as I wish to understand.

There are quite a few factors... bugger if anyone knows the real reason...

1. Rise in $Aud (as mentioned) and the corresponding fall in $USD.
2. The squillions that has been pumped into the US economy by the Fed.
3. The bouyant Oz housing market which almost everyone else believes is in a bubble except for Australia itself. This attracts global fund outflows.
4. Mid 2010 saw mining tax and Rudd's assassination - increase perception of soverign risk.
5. Australia's reliance on China which is tipped to slowdown - either soft landing or sharply.

How we see ourselves vs how others see us can often be quite different. Here's one view...

http://www.zerohedge.com/news/guest-post-2-product-2-customer-wonder-called-australia

 

[sinner]

Re: ASX vs DOW

There are quite a few factors... bugger if anyone knows the real reason...

1. Rise in $Aud (as mentioned) and the corresponding fall in $USD.
2. The squillions that has been pumped into the US economy by the Fed.
3. The bouyant Oz housing market which almost everyone else believes is in a bubble except for Australia itself. This attracts global fund outflows.
4. Mid 2010 saw mining tax and Rudd's assassination - increase perception of soverign risk.
5. Australia's reliance on China which is tipped to slowdown - either soft landing or sharply.

How we see ourselves vs how others see us can often be quite different. Here's one view...

http://www.zerohedge.com/news/guest-post-2-product-2-customer-wonder-called-australia

Not to mention...

The DJIA is 30 of the hugest companies in the world with massive overseas income and cash versus the charted XJO which is 200 of the comparatively smallest large-caps in the equity universe. Heaps of fund managers are playing the "overweight big names underweight small names" play.

 

[odds-on]

Re: ASX vs DOW

Not to mention...

The DJIA is 30 of the hugest companies in the world with massive overseas income and cash versus the charted XJO which is 200 of the comparatively smallest large-caps in the equity universe. Heaps of fund managers are playing the "overweight big names underweight small names" play.

I am very tempted to start buying up some of major US stocks with my AUD as a medium term bet (2-5 years). Major US stocks cheap + AUD high. How can I not win?

Cheers

Oddson

 

[squeegee]

Re: ASX vs DOW

Thanks for replies. I have been thinking interest rates, as this was when interest rates started to bite. Along with mining taxes, carbon taxes etc.

Dow v ASX or S&P500 x XJO....all same showings like for like.

Our gains never follow the US, but our downs are exagerrated. Ive posted before somewhere that if we continue our current trend, and the US tanks, we will be in the 2000 range in no time at all.

Cheers to all!

 

[squeegee]

Re: ASX vs DOW

Billy B......hope you are reight

 

[Gringotts Bank]

Maybe you could treat it as a pair trade. Given the high correlation up til recently, now this divergence.

Short the DOW and long AUS index.

 

[young-gun]

I am a very angry young man these days, and am a hater of the current Aust govt. Anyway, all that aside, could someone please explain to me WHY our markets are trailing the US markets so poorly. Considering the joys of our economy and the woes of the US! And the AUD actually makes the situation look better than it really is!!!!!!!

These days I have become an investor that occassionally trades. My portfolio is down about 20% from break even.

Perhaps my maths maybe wrong.....these % are "circa"

Dow only needs to go up 13% to reach its ALL TIME HIGH. ASX needs to go up 67%!!!! 67% !!!!!!!
Dow is up 86% from GFC lows. ASX is up a pathetic 29% from GFC lows.
Dow is now just 2% off its 2 year high. ASX is 22% off its 2 year high.

Looking at a time line it all seemed to go pear around Aug or Sept 2010.....and I cant find any historical news sites to suggest what was going on around this time to KILL OUR MARKETS.

Anyone have any suggestions? Grealty appreciate as I wish to understand.

there is one main factor already pointed out and that is the stimulus measures. if we pumped the percantage equivalent through our economy we'd be up too. things seem rosie for the US now, but they will come crashing down with us(most likely shooting past our lows given your figures above) around mid 2012 once the stimulus wears off. just a question as to whether the fed will be able to act quick enough to prevent the final meltdown. just MO

 

[kid hustlr]

Re: ASX vs DOW

There are quite a few factors... bugger if anyone knows the real reason...

1. Rise in $Aud (as mentioned) and the corresponding fall in $USD.
2. The squillions that has been pumped into the US economy by the Fed.
3. The bouyant Oz housing market which almost everyone else believes is in a bubble except for Australia itself. This attracts global fund outflows.
4. Mid 2010 saw mining tax and Rudd's assassination - increase perception of soverign risk.
5. Australia's reliance on China which is tipped to slowdown - either soft landing or sharply.

How we see ourselves vs how others see us can often be quite different. Here's one view...

http://www.zerohedge.com/news/guest-post-2-product-2-customer-wonder-called-australia

^^ good reply.

There could be thousands of reasons why we have underperformed the DJIA recently but mkaing the argument 'its not fair that their index has bounced back and ours hasn't' is slightly nieve

 

[joea]

Hi.
I have attached a chart with the XJO overlaid on the INDU.
The charts look a little different.
However there is a slightly bearish outlook on the INDU and the CCI indicator.(trendlines)
If you remain a little patient, and wait for the QLD election, which will put the writing on the wall for the next Federal election, you may see some confidence come back in.
With the USA market and economy, I think the government is concentrating on the $US.
The first quarter of 2012 maybe shadow boxing for a bit.
joea

 

[Starcraftmazter]

Why wouldn't it underperform? What does our economy consist of? Houses and Holes.

Let's have a look at holes....last year it became mainstream to talk about China's potential hard landing, and the view that it might have one became far more popular.

Let's have a look at houses.....prices have been falling - a total of 7% in real terms for 2011, with credit growth flat and bank profit growth very artificial (stripping provisions and now firing staff).

Where is the growth of our banks and miners going to come from? Magic? Also, USA chronically manipulates data.


The only thing you can hope for is a risk rally solidifying in the next couple of weeks lasting for Q1.

Buddy, you need to read some www.macrobusiness.com.au - then you won't be down 20%