Market Summary
The general market was down slightly this week after being up Monday, then sideways for three days and then down on Friday. The XAO was down -0.34% on the week.
The XAO finished on a rising 13-Day Exponential Moving Average which may provide support. Only three S&P Industry Sectors were up for the week.
Best Three Sectors:
Materials: +2.72%
Consumer Staples: +1.37%
Utilities: +0.26%
Worst Three:
Financials: -2.33%
Industrials: -2.37%%
Information Technology: -4.39%
Among the sub-sectors: Property Trusts were down, -0.37%; Metals and Mining were up in line with Materials, +2.78%; and Small Ordinaries, -0.25%. The 50 Leaders under performed the XAO at -5.2% and performed less well than the Small Ordinaries. Risk Aversion/Risk Inclination was weighted to Risk Inclination on that measure. Gold Mining was up at +4.36%.
The market seems to be sending a message that all is not quite right with our local economy (financials and industrials down, defensives up) while the world economy (read China and India) is healthy providing support for our cyclical export oriented industries (Materials/Metals and Mining). Interpretations of the recent minutes of the Reserve Bank are suggesting that interest rates may not be raised in December. If the most hawkish central banker in the world (Glen Stevens) doesn’t move this December, then that may confirm concerns about the local economy and give weight to the Labor Government’s expressed intention to continue pumping the economy with stimulus money. Still – there’s a lot of ifs and buts in there. And perhaps we shouldn’t read too much into one week’s movement in the indices.
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