Australian Investment Blog

The RBA unleashes a beast! Please excuse two consecutive titles with exclamation marks however yesterday was no ordinary day for the ASX200. The local market was trading up around +30 points at 2.30pm yesterday following our script nicely of banks up and resources lower, then BANG the RBA surprisingly cut interest rates to 1.75%, the lowest level in history. The impact on high yielding stocks was almost unprecedented with the market surging an additional 80 points led by the banking sector which closed up over 3% for the day, after actually opening in the red. ANZ had an amazing +8.4% turnaround, hopefully some subscribers managed to get on board from our alert. There was literally only a few minutes window of opportunity. The market is already looking for another rate cut from the RBA as they rarely cut once in isolation - the futures market is pointing to a better than even chance of a second cut by August to 1.5%. This morning we've turned on our Bloomberg machines to see US equities down almost 1% and the SPI futures pointing to a 40 point fall for the ASX200 on the open led by BHP which is down ~~$1 (4.8%) in the US. With such volatility in world markets its time to again clarify how we currently see equities going forward. ASX200 Daily Chart