Despite renewed confidence, sharemarket won't rise out of bear territory soon
Fri Apr 18 2008
The Age --- Page: B8 : 18 April 2008 Original article by Malcolm Maiden
LexisNexis Summary
The Australian economy is slowing and consumer demand is falling. This suggests that the Australian sharemarket will not rally any time soon. The Reserve Bank of Australia (RBA) has indicated that the spate of interest rate rises has slowed consumer demand. Households are cutting costs and reducing debt where they can. The sharemarket plummeted in early 2008, retail sales slowed, housing lending slowed and consumers lost confidence. This became worse after petrol and food prices began to rise sharply. Figures from the March 2008 quarter suggest that inflation is running at 4%, which is way too high for the RBA. Consumers are so spooked and there is so much negativity that share prices will stay low for some time.
