Australian (ASX) Stock Market Forum

ASX 200 - not gaining along with US and Euro markets?

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The S&P 500 just made its highest level since the GFC, yet the Aussie markets are floundering around in close to GFC territory. Hardly participating in the incredible bullish run the international markets have seen from the beginning of the year.

What is going on?

Dollar too high? China?
 

Joe Blow

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Although I understand this thread is a comparison between the Aussie and US/European markets, I think it is probably better suited to "ASX Stock Chat" and have decided to move it there.
 

Bill M

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What is going on?

Dollar too high? China?

+ You can get 6.01% at call and 100% government guaranteed, that doesn't help.

+ Political Uncertainty

there are many more that others will supply.
 
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The S&P 500 just made its highest level since the GFC, yet the Aussie markets are floundering around in close to GFC territory. Hardly participating in the incredible bullish run the international markets have seen from the beginning of the year.

What is going on?

Dollar too high? China?

The rise and rise of S&P is the result of Fed money printing (QE1, QE2, and the stealth QE3).
The ASX 200 index, as you know is dominated by the Big Banks and the miners.
The bank index (XFJ) has been ranging and declining during the last two years because the big investors are staying away from the Big Four for fear of housing bubble bursting. (Investors don't want to hold bank stocks even though the yields are relatively attractive).
The miners (XMM) on the other hand, are hostage to the fortunes of China (BigChart CN:000001).

BTW, Twiddle, how's your trading going?
 
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The rise and rise of S&P is the result of Fed money printing (QE1, QE2, and the stealth QE3).
The ASX 200 index, as you know is dominated by the Big Banks and the miners.
The bank index (XFJ) has been ranging and declining during the last two years because the big investors are staying away from the Big Four for fear of housing bubble bursting. (Investors don't want to hold bank stocks even though the yields are relatively attractive).
The miners (XMM) on the other hand, are hostage to the fortunes of China (BigChart CN:000001).

BTW, Twiddle, how's your trading going?

Cheers for the insights.

Taking my trading slowly, went live a little while back after a long time in sim. Mainly opening breakout trades on the DAX. Progressing with sorting out other systems.

Hard work, but I think I am getting there :)
 
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It helps with companies like Apple listed there.. target price from some analysts are close to 700-800 now.

Plus in America capital gains is treated differently, and their interest rates really low. Everyone goes into shares.

Look in Australia, our interest rates are so high. Tax from capital gains included as assessable income.. not like in America where you are taxed so low.

So many negatives to invest on ASX. A lot of people are investing in property or just saving in term deposits.
 

Garpal Gumnut

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Although I understand this thread is a comparison between the Aussie and US/European markets, I think it is probably better suited to "ASX Stock Chat" and have decided to move it there.

Thanks Joe,

This is an extremely important topic for long term investors from a charting perspective.

Should we break this resistance on the XJO, there will be a consequent increase in the net wealth of many boomers.

It is interesting that we touch and retreat from a move higher, at variance with the NASDAQ and FTSE.

Interesting times.

gg
 
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The rise and rise of S&P is the result of Fed money printing (QE1, QE2, and the stealth QE3).
The ASX 200 index, as you know is dominated by the Big Banks and the miners.
The bank index (XFJ) has been ranging and declining during the last two years because the big investors are staying away from the Big Four for fear of housing bubble bursting. (Investors don't want to hold bank stocks even though the yields are relatively attractive).
The miners (XMM) on the other hand, are hostage to the fortunes of China (BigChart CN:000001).

BTW, Twiddle, how's your trading going?

This^^

Don't worry, when europe and america finally crash(as will we) we will outperform them as our government will know doubt think it's time to begin some sort of QE venture(because its such a great idea, and has such lasting affects).:rolleyes: while the US and europe will be just about all out of options to further stimulate. without having serious consequences that is.
 
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+ Political Uncertainty.

Please stop with this LABOR BAD political uncertainty bull**** - it's really getting old.

The US congress has been pretty much dysfunctional since the last lower house election, they can't get anything passed. Their approval rating is just a little bit above that of paedophiles. Everything that gets proposed gets filibustered - by anyone simply saying so.

No, compared to the US, Australia looks like a bastion of competent politics. And yet here is OP asking why the US markets are rallying and Australian not.



Now to the topic at hand. You see friend, our index is driven by the ASX 8 - the big 4 banks and big 4 miners.

On banking, we have the world's biggest housing bubble just past peak. There is no credit growth. Our banks are holding between 1% and 2% capital against their entire mortgage loan book. House prices are dropping and unemployment is rising. On top of this, the need to service massive mortgages has pushed wage inflation and has made us uncompetitive in the world.

On mining, China is slowing down, it has a housing bubble too - but unlike our incompetent government they are actually doing something about it. What will that result in? Construction companies going bankrupt, lots of stock on the market, rapidly slowing construction activity - which means...less demand for iron and coal - which alone make up close to half of our terms of trade.

We have had a current account deficit for many decades, due to the housing bubble created under the Howard government (ie. Australia pays massive interest to foreign banks which lend us the money to swap houses with each other). And the profits from our mining endeavours are largely going offshore because our governments have failed to tax the mining industry property and limit foreign ownership.

We have an unjustifiably high currency for a country of 22 million who don't produce much of anything of real value apart from a few hearing implants. Every single industry except mining is in contraction and jobs are being lost. We are very much in a recession right now if you disregard mining.

We have amongst the highest private debt to GDP ratio in the entire world, the whole country is loaded up neck deep in mortgage debt. Some people can't even breathe - the water level is so high.

Our real GDP per capita has been flat for half a decade, and our real household wealth has been flat for nearly a decade. The only way there has been any "growth" is through the mass importation of immigrants by the Howard government in the mid 2000s. But this growth has not made anyone richer, it is simply a matter of more people buying expensive crap with credit.



In conclusion, we have one of the absolute worst economies in the world due to incompetent governance for the last few decades, we are the most indebted people, and we are the most expensive country. Why would our stock markets rally?
 
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We have an unjustifiably high currency for a country of 22 million who don't produce much of anything of real value apart from a few hearing implants. Every single industry except mining is in contraction and jobs are being lost. We are very much in a recession right now if you disregard mining.
Even the smaller mines are now in trouble due to the high AUD and high cost of doing business in Australia.

The famous Beaconsfield mine is about to close not because of any ongoing safety concerns, but because it simply isn't profitable to continue mining gold there anymore. There's still gold to mine, but it's just not profitable with costs and the AUD as they are. Also in Tas, the Hellyer zinc, lead, copper, gold and silver mine is also about to close soon too.

As for other industries, well they're being completely wiped out alarmingly quickly these days right around the country. SA and Tas are officially in recession now, and Vic is running not far behind. If you take out coal, iron ore and LNG then there's not a real lot that's going well economically.

We've become pretty much like any of the major oil exporters except that our commodities are iron ore, coal and LNG in that order. Sell some commodities and buy literally everything you need from others. It sounds plausible, but go and visit any of the big oil countries and see how things really are - there's money maybe, but unemployment is extreme and it's no surprise that so many of these countries end up with internal conflicts etc.
 
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