Despite it being over a week now since Australia went to the polls, we are still no closer to knowing who our next governing party will be. This has lead to uncertainty in the market with differences in key policies regarding the mining tax and national broadband network affecting some of Australia’s largest companies.
Leads from the US have also been weak with the Dow Jones Industrial Index closing below the 10,000 point level last Thursday and weak economic growth figures for the second quarter, prompting concerns that the US economic recovery is still uncertain at best. However, Federal Reserve chairman Ben Bernanke announced that the Fed is determined to prevent the economy from sliding into a double dip recession and will use all the tools it has available to avoid this. Bernanke also predicted the US economy would continue to grow modestly for the rest of the year, with conditions ripe for stronger growth in 2011.
In Australia, we are currently in the mix of reporting season, with some key market heavyweights announcing results over the past fortnight. Australia’s largest bank, Commonwealth Bank, increased it’s total revenue for the year by 12%, resulting in a profit for the year of $4.7bn.
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