The Market Wrap 7-3-14

By Jason Fittler

The market rallied this week, but this could just be the last throw of the Bull before we see a pull back into June.

The big news last week was interest rates left on hold. With an indication that inflation is higher than expected, we may see rates start to rise in the new future.

With some good economic data coming out you would start to think all is well with the economy.  (Unless you have recently lost your job.)

Roy Morgan’s unemployment research showed a figure of 12.3%. While the Australian Bureau of Statistics showed 6%.

This indicates to me that the economy still has some way to go before we see the Bull markets return. Until then we’ll continue to see weakness in the market, as investors remain wary and cautious. This is a good thing as it means that the market will move up based on performance not on a common belief that all is good.

Note: Prices of companies have grown faster than earnings.  This is another red flag. It indicates that the growth we have seen over the past two years will slow.