The Market Wrap 6-12-13

By Jason Fittler

With the market breaking down through 5200 I expect that we have seen the short-term top for now.

Our economy continues to struggle. We have seen a number of companies down grade earnings. The most recent is QBE, which had a major affect on their share price.

There has been a number of floats hit the market over the past month. The performance of these floats indicates how over bullish investors are becoming. No consideration has been given to quality of the businesses on offer.

Expect to see the investment banks book some great profits for the half year as they collect their fees from the floats. As for your super, it will suffer the loss.

The economy is still bottoming no matter how much people talk it up. The fundamentals need to change and this will take time, it will be years before the rest of us benefit.

Over the past week we have seen the share price of companies with results below expectations fall hard.

The level of emotion and therefore volatility in the market is very high at present.

This means opportunity for the value investor.

QBE is one I am watching very closely.