Over the past fortnight, worries over the Greece sovereign debt issue have weighed on our market, with the All Ordinaries Index falling to a level 4,322 points on Thursday. This level is 13% below the recent high of 5,024 points.
Share market analysts are referring to the recent weakness as a ‘bull market correction’ meaning it is a pause in the recovery following the Global Financial Crisis, rather than a new downturn in the markets. Shane Oliver, Chief Economist from AMP Capital Investors puts it this way:
”The global recovery is likely to remain on track, the profit outlook is positive, monetary conditions are easing, China is likely getting closer to easing up on its tightening measures and shares are now very cheap again”
In the US, whilst there has been positive economic news flowing through, markets still remain nervous about Europe and the Dow Jones Index recently fell below the psychological 10,000 point level.
Locally, the economic news remains positive, with interest rates moving to more normal levels, unemployment falling and the retail sector showing strong sales in the lead up to the June 30 end of financial year sales.
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