Market Outlook

[skivvy]

Just wanted to start a thread to get various opinions on the outlook for the financial markets. I understand that opinions will vary depending on each individuals own strategy and timeframes for trading. I have watched the markets around the world rally back after the GFC in 2008 and it has been a very good ride since then, a once in a lifetime buying opportunity. Over the last month things are starting to look a little fragile especially in the US and the sovereign debt issues in Europe have added further uncertainity. I have read some pretty damning reports on the outlook for the markets in particular the US and things such as the Hindenberg Omen have me a little concerned for the outlook.

I am no master in economics but I do understand that any deterioriation of the US markets will be felt the world over and it will really shake the tree of investors. My take is that being a commodity rich economy we are reliant on exports to Asia, in particular China and India and as long as these economies continue to grow we will be ok here in Oz. The downside is, a big slowdown in the US will effect the exports out of China which will effect our export markets into China and therefore our financial markets will pull back also.

With all the stimulus which has flowed around in various markets I feel that the boom, bust cycle has been unusually altered and we may not have had the sustained contraction cycle which would be expected after such a long bull run due to the impact of stimulus and the sharp reduction in interest rates which occured post GFC.

Look forward to some comments on the way the markets may play out over the coming months.

 

[vincent191]

"The downside is, a big slowdown in the US will effect the exports out of China which will effect our export markets into China"

This is true to some extent but don't forget China has a population of 1.2 billion their domestic demand is enormous. Most of our exports have been used to build domestic infrastructure and to satisfy their energy needs.

I agree a big slowdown in the US will have some effect on China but as long as their domestic demand and domestic disposal income remains strong Australia's resources sector will continue to do well.

Plus what we might lose at the traffic lights we will pick it back up at the roundabout. India is growing and their needs will have to be satisfied. This is shown by their recent acquisitions of some of our coal mines.

All is well, as long as the Oz government don't screw it up. We have enough resources to last for centuries but not enough capital to develop them. Reckless tax grabs will strangle the investments need to get the wealth out of the ground.