Glenn... Thanks but no thanks...
So… Glenn Stevens listened to us and cut interest rates to a record low of 1.5%.
However, just as we expected, the banks only marginally passed on the interest rate cuts (WBC a 0.14% reduction was the highest) but to “stimulate” the economy, they increase term deposit rates … slightly.
So should we now move our cash into fixed-income deposits?
Not if you believe that you can live off the ~2% a year vs. fully franked dividends of ~ 6.3%....
Last night, The S&P 500 fell 0.6 per cent to 2157.07, the lowest close since July 13.
Data showed US consumer spending rose more than expected in June as households bought a range of goods and services. However, personal income rose only 0.2 per cent, missing estimates of 0.3 per cent, while inflation remained below the Federal Reserve's 2 percent target.
Also Credit Corp (CCP) and ResMed (RMD) will be in focus for their positive earnings surprise. SWMmay come under the spotlight again this morning after shedding more than 16% of its value for its lacklustre result…
What's on today?
Rio Tinto half-year results will be in focus
Also Weebit nano (WBT) debuts on the ASX (with Dadi Perlmutter, who was 2nd in charge in Intel taking charge), this should be a stock to watch.
The SPI is down 29 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