Global stocks “halt” as Gross questions bank policies… where to now?

10/06/2016 - 06:28
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Good Morning, yes, it’s Friday…. This week, we’ve seen US stocks trading near all-time-highs, where the ASX continues to “grind” and just doesn’t want to “follow through”…The ASX reached over 6,700 points back in July 2007 and is still ~40% from its highs, where US and European markets have surpassed their 2007 highs by well over 30%.So does this “70% underperformance” have to do with political uncertainty? Interest rates that are “relatively high” vs. G20 or just confidence?

Good Morning,

 

Yes, it’s Friday….

 

This week, we’ve seen US stocks trading near all-time-highs, where the ASX continues to “grind” and just doesn’t want to “follow through”…

 

The ASX reached over 6,700 points back in July 2007 and is still ~40% from its highs, where US and European markets have surpassed their 2007 highs by well over 30%.

 

So does this “70% underperformance” have to do with political uncertainty? Interest rates that are “relatively high” vs. G20 or just confidence?

 

Last night, US stocks fell (Dow Jones -19 points), as Bill Gross, the manager of the $US1.4 billion Janus Global Unconstrained Bond Fund, warned central bank policies that pushed trillions of dollars into bonds with negative interest rates will eventually backfire violently. 

 

"Global yields lowest in 500 years of recorded history," Gross, 72, wrote Thursday on the Janus Capital Group Twitter site. "$10 trillion of neg. rate bonds. This is a supernova that will explode one day."

 

In Oz, keep an eye on Virgin Australia today as interest grows….

What happened yesterday

Australian shares dipped slightly on Thursday, with miners trimming strong gains following more rises in commodity prices, while the banks continued to sink and packaging giant Amcor issued a profit warning. The benchmark S&P/ASX 200 index dropped 0.1 per cent to 5361.9, while the broader All Ordinaries dropped 0.1 per cent to 5437.4

The SPI is down 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.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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