|Data for week commencing 18 June 2018|
Fears about Trump’s tariff talk, trade war tension and Telstra were big negatives for the stock market this week but our S&P/ASX 200 index defied the Dow’s eight-day losing streak to push into 10-year highs! Why? Here’s a list of reasons I put forward on Thursday in my Switzer Daily column:
- The lower dollar that has come with US interest rates rising and the greenback moving higher. A lower dollar is good for our economic growth.
- Morgan Stanley thinks foreign investors are “parking their money” here, with the Euro threatened by trade war talk.
- Some Chinese demand for expensive US goods could be diverted to Australia in a trade war, which could be good for education sellers and even beds from the A. H. Beard company, which already sell its products in China.
- China could also boost its demand for Aussie LNG, if the USA is to be punished for Trump’s tariffs.
- Also, if China’s economy is threatened by a US trade wall, it might stimulate its economy, which would pump up demand for the likes of our coal, iron ore and other mining products. And I guess Chinese tourists could be told to give the USA the flick, which would help us.
But the big one was the re-loving of our bank stocks, which started Thursday week ago, when CBA hit its recent low of $67.22. It finished on Friday at $73.86, which is a 9.8% turnaround!