The market rallied this week with the big news being the Budget.
Well, big news for the media not so much the market.
However, with the generous write-off provisions and lower tax rates handed out to small business we have seen the retail companies improve over the back end of the week.
These measures in the budget should at least provide a short-term sugar rush for small business that have been looking to get some new equipment or possible looking to put on more staff.
For our economy to improve we need people employed and unemployment to fall. Given small business employs 44% of the workforce it is the right stimulus at the right time.
We continue to be cautious on the banking sector and instead are looking towards materials, energy and retail for future growth in client’s portfolios.
We are also slowly building positions in the International sector again with a focus more on growth than income.
If you hold the banks, you may want to look at reweighting, especially if overweight in the sector. But, continue to maintain exposure for the benefit of the high yield.