Markets never react irrationally..they merely reflect the human capacity (if not love) for that type of behaviour..and not only at cycle extremes LOL
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Not sure - actually, I think the markets behave currently quite rational. Markets are controlled by people with money. They like the idea of the new US administration making them richer (by reducing taxes and investing into infrastructure, good for business). They don't mind poor US people being screwed by Trump. Markets probably like as well the idea of Putin, Trump, Assad and Erdogan making love and business between each other and don't mind about some poor Syrians being killed. Poor Syrians don't matter and rich Syrians are part of the Assad clan (and live in paradise).
Why do you think markets behave irrational (well, more than they always are)?
Are left wing governments better for dividends and right wing governments better for share prices? It could be argued that left wing governments that aid the redistribution of income (via tax cuts etc) to the poorer in society actually help stimulate business. Each dollar at the disposal of a poor person is more likely to go towards purchasing goods and services (and filling government tax coffers). Each extra dollar at the disposal of a rich person is more likely to go into boosting the prices of assets (especially land in the NZ context.) What is good for business and the economy and what is good for the wealthy do not necessarily have to be connected.
Are liberal politics actually better for business? http://blogs.spectator.co.uk/2015/05...wing-politics/.
I think that the right wing policies of cutting back on benefits to the masses and ditching things like medical-environmental controls-anything that stands in the way of oil or other profits ,are what the market is hoping will boost the economy.Morality is another issue.The wild card though is whether a totally inexperienced bloke and his mates will stuff things up to the point of unhinging everything--once a trade war starts its uncharted territory--USA would probably be more comfortable with a real war.---Keep in mind..It doesnt have to benefit the country or even the economy...it only has to benefit the bloke and his mates....We shall see
and yes Hoop ...i personally think markets (people en mass)are acting irrationally atm---(it feels like the ''be fearful when others are greedy'' stage) ..but of course the ''market can remain irrational longer than we can stay solvent'' (choose your cliche)
Another day in market paradise.
If you look at performance of different markets last 60 days can see where all the money is flowing
Security Name 60 Day PERFORMANCE DOW TRANSPORTS 17.79 OIL 11.57 Russel 10.03 JAPAN 8.29 FRANCE 7.01 DOW INDUSTRIALS 6.56 GERMANY 5.32 AUSTRALIA 5.19 US DOLLAR 5.01 CHINA 4.88 CRB 4.65 LONDON 3.55 S&P 500 3.36 NASDAQ 3.01 BRAZIL 1.71 HIGH YIELD 0.79 EMERGING MARKETS -1.75 DOW UTILITIES -4.35 HANG SENG -4.68 NEW ZEALAND -5.36 INDIA -9.67 GOLD -10.91 TLT -11.09
roughly since us election
Security Name 30 Day PERFORMANCE DOW TRANSPORTS 15.8764 Russel 10.8737 JAPAN 7.6353 DOW INDUSTRIALS 7.1558 S&P 500 3.734 FRANCE 3.3888 CHINA 2.9064 GERMANY 2.1323 US DOLLAR 1.7649 NASDAQ 1.1138 CRB 1.0557 AUSTRALIA 0.6486 OIL 0.1995 HIGH YIELD -0.9723 NEW ZEALAND -1.6151 LONDON -1.6446 DOW UTILITIES -2.8919 HANG SENG -3.2429 BRAZIL -4.4311 EMERGING MARKETS -4.608 INDIA -6.6035 GOLD -7.7647 TLT -9.7667
Thanks Bull, your figures highlight what I've been suspecting. Foreign investors withdrawing from NZ in the expectation of greater gains to be had in the USA.
Interesting table, cheers.
Makes one wonder, though ...
Why is the DOW Transports doing twice as well as the DOW Industrials?
What is the growth story behind Japan, France and China?
How can the expected isolation of the US be good for the DOW as well as for Japan and China?
interesting times, for sure ...