Market Overview:
November 2009
Crisis.. what crisis?
Despite the strong recoveries by local and global sharemarkets, the question now is whether the upturn is sustainable, or if the initial rebound will slow to a more sluggish, longer-term recovery.
With the Australian sharemarket clocking up seven consecutive months of positive returns, Australian consumer sentiment and business confidence has improved significantly. We’ve reached near-universal consensus that the worst global recession in over 50 years is behind us.
Optimism continues to build on the outlook for the Australian economy. However, there is a danger that the current bullish international investor sentiment towards Australia is overdone.
Quick Overview
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Global recovery in early stages. Earnings per share rebound underway. Plenty of cash still on sidelines.
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Valuation extremes now largely unwound in risk assets. Value depends on continuing corporate profit recovery.
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AUD close to a valuation extreme but no obvious catalyst for a reversal.
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