Good Morning,
Happy 30th of June…
Yes, it is the end of the financial year today and aren’t we glad, especially after the past week…..
Pre pay your interest, look for some tax deductions and contribute more to super… this is your last chance before next FY year…
So….
The world seemed to “cough” and has now got over its cold… for now…
Global stocks rallied overnight, as investors started to feel that things in Europe aren’t “as bad” as first thought and that a lower GBP would stimulate exports….
They are correct…. In part…
The big focus we are looking at is US payrolls for June and any number larger than last month’s 38,000 jobs, would be encouraging…..
“The U.S. is continuing to do well, and that’s also cushioning the reaction to Brexit,” said Brad McMillan, chief investment officer of Commonwealth Financial Network in Waltham, Massachusetts, which oversees $100 billion.
“It’s looking increasingly likely that the worst case scenario, which is what markets initially reacted to, is not the most likely case. The initial reaction was overdone and what that did was set the ground work for a more organized and thoughtful reaction later on.”
EU leaders have said that there can be no turning back for the U.K. and warned Prime Minister David Cameron that a delay in activating the EU exit mechanism will prevent the start of negotiations over any future relationship.
More importantly, the ECB has the tools to respond to the fallout from the U.K’s vote to leave the European Union, Vice President Vitor Constancio said. South Korea announced a fiscal stimulus package and Bank of Japan chief Haruhiko Kuroda said more funds can be injected into the market should they be needed.
In Oz, we should see another day of green, spurred by oil and expect to see some buying in the banks…..
The SPI is up 23 points this morning
Niv Dagan is an Executive Director of Melbourne based boutique funds management and corporate advisory firm, Peak Asset Management (www.peakassetmanagement.com.au). He is also a regular financial commentator on Sky Business.
