Did we see a “Dead Cat Bounce” this week?
There is little in the economy to be excited about.
The housing bubble is still key, and employment dropped by 0.1%.
But let's take a closer look.
There were 42,000 new jobs created of which 29,000 were part time and the rest, full time.
What also improved was an increase in monthly hours worked which was up 0.1%. This means people are working longer each month.
All positive so far, however, underemployment is still 14.5%. Although down it is still a concern.
The participation rate is currently 65%, which means of people able to work 65% do. The underemployed rate is 14.5% of these people; as such, 14.5% of working Australians are still not getting enough work.
Employment is the key to a stronger economy, the message I think Joe Hockey was trying to get across this week. While employment struggles so to will many Australia companies.
In this type of market, we look to focus our investing in the companies that supply non-discretionary items such as power and energy as opposed to retail companies that rely on a booming economy for increased profits.
I expect our market to hold steady or move up slightly as we approach the end of the financial year. The past 2-years has seen good returns for the market.
2015 I expect to close fairly flat.