What a week with the market putting on 232 points or 4.1%.
Interest rates were cut again down 25 bases points to the official rate of 2.25%.
Homeowners should be able to pay their debt down faster while the retired now have less to live off.
I suspect more people will move from the safety of cash into shares. They will be chasing some sort of income to allow them to maintain the cost of living.
Will dropping interest rates by itself save the economy? NO. We also need to see some spending cuts. But, these were voted down at least in Queensland last weekend.
The stock market is in my view looking top heavy. I am cautious that we may see a pullback in the short-term.
The internals has not yet confirmed that this is a genuine rally so caution is advised.
There are still many buying opportunities with stocks like Cardno, Woodside, Platinum Capital and the top 100 Global Fund. These all are looking like good long-term buys at present.
Next week the Commonwealth Bank will report. This should give us a good idea how the banking sector is going and if these rate cuts are stimulating people to borrow.