The six Cs that turned the market
If you were wondering what has caused markets to turn, you need to take a look at the six Cs – China - consumer demand – commodities – currencies - central banks and company earnings.
Let’s take a look at each one.
Recent data out of China indicates that growth is stabilising and fears of a hard landing were overstated. Also recent flash PMI numbers for advanced economies showed activity is picking up. Claims that the global economy is in the throes of a broad-based downturn have been exaggerated.
- sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 28 Oct 15
-
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healt...
Duration 02:31
-
-
If you were wondering what has caused markets to turn, you need to take a look at the six Cs – China - consumer demand – commodities – currencies - central banks and company earnings.
Let’s take a look at each one.
Recent data out of China indicates that growth is stabilising and fears of a hard landing were overstated. Also recent flash PMI numbers for advanced economies showed activity is picking up. Claims that the global economy is in the throes of a broad-based downturn have been exaggerated.Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
-
Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healthcare bill
Duration 02:31
Let’s take a look at each one.
Recent data out of China indicates that growth is stabilising and fears of a hard landing were overstated. Also recent flash PMI numbers for advanced economies showed activity is picking up. Claims that the global economy is in the throes of a broad-based downturn have been exaggerated.
Consumer demand in China has also been stronger than expected. The recent fall in the Chinese stock market appear not to have had any real effect on the Chinese consumers.
In the US, the consumer is coming back - the recent housing market data shows significant improvements in the market - beating expectations.
Here at home, strong consumer demand has prompted domestic banks to raise interest rates outside RBA moves. Whilst it impacts home loan rates, it also makes term deposits more attractive.
The commodity market also seems to have stabilised, supported by the expectation of better demand from China and globally.
For currencies the US Dollar has rallied recently following announcements by the People’s Bank of China and the European Central Bank.
The stronger US Dollar is supporting many export-orientated equity markets, including Japan and Europe.
The Central Bank of China has delivered another cut to benchmark interest rates and the required reserve ratio. This loosening is part of a controlled easing cycle that began months ago and policymakers still have more room to move.
In Europe, the ECB left monetary policy unchanged - but gave strong signals that the Quantitative Easing program will be expanded in December. The ECB also apparently discussed a further reduction in the deposit rate, which is already at minus zero point two %.
Meanwhile in America, the Federal Reserve is expected to keep rates on hold at this week. The market now doesn't expect a rate hike until 2016. There is also an expectation that the Bank of Japan may loosen policy soon as well.
And finally company earnings - earnings in the US have been better than expected with 70% of companies beating expectations so far. Major tech companies such as Amazon, Google and Microsoft are leading the charge. That said, there is still another 350 companies of the S&P500 to report.