Sunset Strip (Afternoon Report) - Aussie market pulled back violently after once again struggling to break the S&P 300 target of 5500 on China and Euro worry

Sunset Strip (Afternoon Report) - Aussie market pulled back violently after once again struggling to break the S&P 300 target of 5500 on China and Euro worry. Mixed US corporate/macro updates, rising Ukraine risk, China growth risk, Bank dividend cycle sell off, Stretched valuation and institutional investors coming back after 2 weeks holiday drives the risk/return balance towards profit taking mode. We expect US Fed to maintain tapering time table and China leadership to slow growth to reduce credit risk. Budget: We expect the government budget to tax heavily in the first few years and then deliver a surprise income tax cut in the final year before election while corporates will get a free run with selected welfare schemes. The tax plan of the government will drive down consumer sentiment in the short to medium term with rising unemployment and cost of living pressures. (VIEW LINK)