Economic figures were out this week.
Inflation is higher than expected which means future interest rate cuts are less likely.
Unemployment is now clearly heading higher due to a range of government jobs to go and the economy generally bottoming. We have been flagging for some time that unemployment will hit 6.5%.
China’s GDP was slightly higher which rallied the market.
On Thursday, China announced its purchasing index was down. This affected the market but the big players did not seem too concerned.
We continue to buy BHP and RIO on any weakness.
The resources boom may be over but the world still needs resources and if Abbott gets his changes through they will be cheaper to produce. Growth in the Australian economy depends largely on these changes happening.
We continue to slowly buy into the market with a long-term view.
However, there will be short-term volatility.
This is a good time for value investors.