The Market Wrap 3-8-12

By Jason Fittler

The last week has seen a good recovery in the market before closing down on Friday.

But what is still clearly shown in the above chart that the market is still in the trading range of between 4000 and 4400. We expect that it will stay in this range for some time to come.

The issues in Europe will continue to raise their head from time to time and investors are still nervous about the market.

I continue to expect further interest rate cuts in the coming months which will push more cash investors back into the markets as their income starts to fall.

We have seen cash investors move into bonds pushing down the yield to just above the cash rate. We have also seen investors move into high yielding utilities companies. I expect that this trend will continue on any future cash rate cuts.

The big news locally has been the job cuts by Queensland State Government. This is a clear signal that the tough times are about to start for the individual person.

As such we continue to focus on those companies which provide products and services which are not discretionary, such as Banks, Materials, Utilities and consumer staples. Services which people will still pay for no matter how tight things get.

For more information on any of the above please contact us on 07 4771 4577.