Morning Report Tuesday 5th May 2015
The Banks officially correct as we ponder if the RBA will again cut rates
Its official the banks have corrected after Westpac’s average result yesterday – from their highs, to yesterday’s lows, ANZ has fallen 10.8% and Westpac 12.8%. The question I have been asked numerous times over the last few days is when do I buy them? Interestingly nobody is considering selling them….
For the stock market a correction is defined as at least a 10% pullback, as opposed to a Bear Market where the retracement is over 20%.
Today at 2.30pm we have the second main influence on the banks share price, along with corporate reports, the RBA decision on interest rates. If you believe today’s press the decision has already been made and leaked; today the RBA will cut rates to 2%. This time around the RBA appear to have switched from the Murdoch press to the Fairfax camp to set the market expectations. – the futures market is factoring in a 71.4% chance of a rate cut today.
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