Morning Report Friday 8 August 2014
RIO reports great earnings and the stock falls in London and the US?
With investors currently obsessed by yield, nobody is looking at the miners in this context, but this may be a mistake. Australia’s unemployment rate rose to 6.4% yesterday, well above the anticipated 6%. Instantly the market became focused on further potential interest rate cuts as opposed to rises as is the case in the US. The Australian dollar has fallen to 92.7c from above 95c last week, which will please the RBA and potentially reduce their urgency to change monetary policy until further economic clarification unfolds, but for certainty, rate rises are a distant thought for Australia at present. Getting the correct mix of capital growth and dividend yield in a portfolio is vital when we consider the below simple fact:
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