Sunset Strip | Aussie Afternoon Institutional Market Wrap

Aussie market ran over pessimist with another 1.5% move up on US Fed doing what most of us expected them to do. The world is artificially being held down to low growth and low inflation to avoid any recession risks by central banks and governments. The problem with that solution is that in order to reduce risk, you accept the risk of being stuck in a stagnant mode for a lot longer than the “recession and recovery” cycle. Australia avoided the recession risk at GFC and now unwilling to take the medicine to reform and drive change due to political self-serve mode. The MYEFO (i.e. Mid-Year Enormously Flawed Outlook) was based on the fact that the government comes up with fantasy savings to make things look balanced while the senate blocks it and becomes the bad guy. As we have been saying for the past 3 weeks, despite recent profit taking Christmas rally was expected to start its third leg with US Fed move… and we have had nearly 4% move up in 2 days!!! (VIEW LINK)