Is it a market “melt-up”?

• There is still little clarity on the geopolitical front.
• The S&P 500 hit another all-time high and closed above 6,300 for the first time yesterday. Sell signals are starting to flash as valuations are stretched (26 times forward earnings!).
• Having successfully sold a business to a NASDAQ-listed company in 1998, I am acutely aware of the 2000 dot-com bubble when stock prices rose substantially above underlying asset values, resulting in a market crash.
• August reporting season will tell us if US corporate earnings can keep pace with these frothy valuations. Interestingly, Australia is on track to deliver its third year of declining profits.
• Iron Ore futures are at a five-month high on the back of China’s plans to build a massive dam project in Tibet, Gold is also up $US3,423. Consequently, the S&P/ASX 200 is trading up today now at 8,738.6 as I type.
• CPI figures out next week will hopefully see the RBA firm on cutting rates at their August meeting. The unexpected jump in the unemployment rate to 4.3% is seen as enough reason to move.
• The Perth housing market remains close to historical lows (just under 3,200) with total properties of 3,419 available for sale (houses, apartments & land).
• I suspect there is a lot of money coming out of high net worth super and into property at present, so I see no let-up in the strength of demand for the Western Suburbs.

Call me for a strategic plan to maximise your sale price in this tight market with new demand drivers.

Jody Fewster
0414 688 988
jody.fewster@raywhite.com