NZX50 Level on 31 December 2016 ?

[Beagle]

With so much uncertainty in the world I thought it might be interesting to get a gauge on where you think the NZX50 will be at the end of the year, (6,107) as at the time of starting this thread.

Thought we'd run a poll to see. I'll vote later so as not to be perceived to be influencing the outcome.

[Hoop]

Roger..You seem rather bullish with the poll make up..

For the NZX50 to officially enter a bear market cycle (-20%) the index would have to fall to ~5000..
Usually a bear market cycle is much larger than -20% ...a -30% bottom is considered a weak/mild bear market cycle (~4200)

It would be interesting to see how many ST members think the NZX50 will be in a bear market cycle by 31/12/2016 as of now...so a lower than 5000 option should be included..EDIT perhaps also including lower than 4000

Also, a cut off date is warranted (you have done this) and another similar poll started to gauge the changing attitude of ST members as the NZX50 plays out during 2016..

[Beagle]

Many thanks for your input Hoop but it seems difficult to change the make-up of the poll at this late stage. People may be aware that the NZX50 gross index includes dividends paid for the year so a fall below 5800 implies a reduction of around 5% from the current level notwithstanding that the index by year end will include the accrual of all dividends paid by NZX50 companies during the year. Approx 10% decline in real terms ? That would make a vote of lower than 5800 pretty bearish.

[winner69]

OK -

Scenario 1: Forsyth Barr says eps up 10% and dividends up 14% this reporting season. If no market rerating index to go up at least 10% ....yes? Scenario 1 then 6700

Or

Scenario 2: Craig's say in paper today.'Despite last month's global sharemarket rout, the S&P/NZX 50 is still trading at roughly 19 times earnings, well above the historical average since 2001 of around 15 times.'. Implied EPS is thus 321. PE reverts to average 15 (when reverts usually overshoots) so NZX goes to 4800. Healthy earnings but a realistic valuation.

See which of Rogers scenarios I voted for

[Beagle]

Looks like a good year to be holding some cash then Winner :)

[Nasi Goreng]

How can you take historical PE averages into account when interest rates are at the levels they are and likely to get lower?

Investors are choosing stocks for dividend yield against a backdrop of 2.5% rates. If OCR was 5% u could see stocks being over valued.

I appreciate this is a blunt argument and there are further things to consider but I would be surprised to see dividend yields rise on the NZX over the next year and therefore I'm not too worried about a bear market as of right now.

I find the NZX really interesting as it doesn't truly match the main drivers of the NZ economy. There are no real dairy, agriculture or tourism stocks that match the size of the index so therefore dairy could slow but the top 10 stocks on NZX may continue to do well.

[skid]

I think it should be noted that if it hits the fan ,the NZX is but a minnow in a large potentially swiftly flowing river (amoung some really big fish) what I am getting at is that if things get to a certain point NZ will cease to be in its insulated cocoon as has been the case so far.
It could well be ,that we have been lulled into a false sense of security-we could easily be swept away ,regardless of whatever share you choose to use in the debate.
I believe that there is enough wrong atm that the odds are not looking as good as a year ago. Ive seen how quickly things can change from the mind set of ''you gotta put your money somewhere and the Share market is best returns'' can come unstuck, so Im going to risk lost profits ,rather than lost assets. (but dont confuse that with hoping it will happen) Good luck to all

[winner69]

Nasi - AMP pointed out in a recent paper that over the last few years dividends have increased faster than earnings on the NZX. Forbar are forecasting earnings increase 10% and dvidends up 14%

A sustaiaable trend?

[Nasi Goreng]

I agree with you there. There are a few stocks that spring to mind who have been upping dividends at a faster rate than earnings. The power companies, spark + buy backs, GXH recently borrowed money to pay a special dividend which I didn't quite understand but enjoyed banking the cheque.

It is very stock specific and there are a lot of responsible dividend payers out there, we just need to read between the lines when valuing them.

[HRM]

I find the NZX really interesting as it doesn't truly match the main drivers of the NZ economy. There are no real dairy, agriculture or tourism stocks that match the size of the index so therefore dairy could slow but the top 10 stocks on NZX may continue to do well.

Thats a good and interesting point.

[trader_jackson]

Thought we could revisit this... so with the NZX approaching 6600, although I realize we are only in march, do the almost 1 in 2 voters who voted for under 5800 have any comment? (actually, does anyone have any further comment?)

[axe]

Thought we could revisit this... so with the NZX approaching 6600, although I realize we are only in march, do the almost 1 in 2 voters who voted for under 5800 have any comment? (actually, does anyone have any further comment?)

Long ways to go in the year - anything could happen. I wonder who the one person who voted for above 6500 was .... :)

[Schrodinger]

After watching the NZX over the past two years it appears to be on a random walk and is not coupled to overseas markets or their drivers (liquidity issues) and volatility is very low. In other words too hard to predict.

[Beagle]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11607422 Stockbrokers still expecting another ~ 7% gain from here...mostly in the form of dividends 4.7% average dividend yield.

[Beagle]

With so much uncertainty in the world I thought it might be interesting to get a gauge on where you think the NZX50 will be at the end of the year, (6,107) as at the time of starting this thread.

Thought we'd run a poll to see. I'll vote later so as not to be perceived to be influencing the outcome.Posted 9 February 2016
Well is that some sort of turnaround in the last seven weeks or what !!

6752.42 close today / 6,107 when I started this thread is a whopping 10.6% increase in 7 and a bit weeks...who would have thought !!

Anyone want to play a game and have another guess for year end ? I'll kick it off and guess 7,000 which is not as outrageous as it sounds as its basically the index in terms of capital value going sideways for the rest of the year and it gradually rising to include dividends paid, (its a gross index inclusive of dividends as we all know).

[Baa_Baa]

Well is that some sort of turnaround in the last seven weeks or what !!

6752.42 close today / 6,107 when I started this thread is a whopping 10.6% increase in 7 and a bit weeks...who would have thought !!

Anyone want to play a game and have another guess for year end ? I'll kick it off and guess 7,000 which is not as outrageous as it sounds as its basically the index in terms of capital value going sideways for the rest of the year and it gradually rising to include dividends paid, (its a gross index inclusive of dividends as we all know).

Only 3 months into the calendar year and for an oldish dog, you're c0ck a hoop on the next 9 months! I admire your perma-bullishness, though why not let the poll run as is and we'll see who has crystal balls?
;)

[couta1]

I stick with my above guess of 6400-6500 at end of year but with a lower level before that, this current run is going to run out of legs and we know what that means now don't we.:scared:

[axe]

what was the prize that roger was putting up? A delicious apple from SCL maybe? :)

[Beagle]

Baa Baa - 7000 is only a 4% increase from here mate for the next 9 months and the vast majority of that is simply dividends that will accrue so not really that bullish.

My base case is anything with a material dairy exposure, be it banks, SKL or PGW will "at very best" flat-line from here and pay similar level's of dividend as last year. Interestingly recent developments as reported by NBR behind the pay wall is that the futures prices for dairy for the rest of 2016 have recently flattened right off so the market is now saying there's no prospect of a recovery this year. Further in a recent survey 86% of respondents thought a dairy recovery will be a long time coming. Basically, lower for a lot longer so I am avoiding any company with meaningful dairy exposure and have liquidated my modest holding in PGW shares notwithstanding their excellent yield. Reading the interim report today worried me and I now think there's the real prospect that they will undershoot their FY16 guidance and 2017 could be lower again. I see a similar theme playing out amongst other companies with meaningful dairy exposure with all the apparent risk to the downside.

Some sectors still have good tailwinds, Tourism in particular, and with the lower dollar so should still kick on a bit from here, especially the one with a potential take-over in play :)

AIR has turned into a bit of a lottery depending on if, when and how much they can exit their stake in Virgin for, this alone will have a material effect on this year's SP performance.

The other theme though that I see driving the market is ultra low interest rates for the foreseeable future and I see the OCR coming down to circa 1.5% over the next 12 months so that's a hugely assistive environment for any stable reliable share with a meaningful yield and should be supportive of the market overall. I continue to expect REIT's to do well with billions of dollars of term deposits rolling over this year and being offered less than 3% will simply force many investors to take on board some risk to maintain a reasonable lifestyle.

Holding a reasonable sized cash allocation after this recent market spurt makes good common sense as a short term strategy too IMO.

Anyway...that my 3 cents worth after turning the long range radar up to maximum sensitivity.

[winner69]

If they drop a few laggards from the NZX50 and replace them with better stocks that'll help as well.

Good thing that survivorship bias

[noodles]

Some sectors still have good tailwinds, Tourism in particular, and with the lower dollar so should still kick on a bit from here, especially the one with a potential take-over in play :)

Roger, what are you referring to?

[Beagle]

What do fish have ?

[Big Blind]

Halitosis?

[noodles]

What do fish have ?
Scales.
I thought you were referring to a tourism related stock.

[Beagle]

Scales.
I thought you were referring to a tourism related stock.

My bad mate, that sentence was a little ambiguous and could easily have been interpreted the way you took it but it was always intended to include other sectors with tailwinds :)

Back to the subject matter, as crazy as it sounds the NZX50 at 7500 by year end wouldn't surprise me because taking into account accrued dividends between now and then, that represents a circa real 500 point capital gain from here, about 7.4% up from the current level. Sounds crazy but is it really ?, considering there will be some earnings growth this year on average by NZX50 companies and its also possible we'll see some further PE expansion as we head down to 100 year low's in interest rates. The optimist, (Bull), in me thinks its still possible to get a double digit portfolio gain for the balance of 2016 talking into account dividend yield and careful stock selection...or is this an April fools joke, you folks be the judge :)

[Mickey]

She's on a pretty steep climb....

https://www.anzsecurities.co.nz/DirectTrade/dynamic/chart.aspx?key=FpY1Zm%2fWf7hVn%2fF%2fnOFr%2fAE9mSx MtNzK%2fPFIkd1dXrsu2gkammVRFuGP732UGBNFFlxUlxjpzMy fZH7AXjP%2fxYBMN0RZcH%2fTg2O6KyO9z5cx6iFZxkijdlHrm bg31W%2b7zfSxpPjjKv7QDE%2fiPn7FOykg7PsvgmbYmQQ4Nfw w1G5jKvNSHF860CcihbobPxfNV2QfW%2bzW%2f%2bd9vfdugfy 7HsbtY52IfrI1mznZPpfo4np5QhuOFjRgH4pgD%2foMLUNg950 nnvu0YntAuj0yTSrvyTofZEG7vSeL

[Hoop]

Anyone feeling exuberant yet? :mellow:

[Snow Leopard]

Anyone feeling exuberant yet? :mellow:

That's when the roller-coaster reaches the top of the chain lift and you get that wonderful view of all that blue sky and the infinite horizons - right?

Best Wishes
Paper Tiger

[troyvdh]

Thanks Mickey....Hoop perhaps a little ...nah ...not at all...no irrational behaviour involved here ...perhaps maybe..I agree with you...maybe...oh gee...it aint easy..we have declining interest rates and an increasing demand for yield...blah blah....property/ power companies et al all provide a good yield ..then we have retirement entities with supposedly bullet proof futures...

[Baa_Baa]

Anyone feeling exuberant yet? :mellow:

Euphoric even. It's different this time. Cough.
:eek2:

[Beagle]

If they drop a few laggards from the NZX50 and replace them with better stocks that'll help as well.

Good thing that survivorship bias

Sure is mate. Diligent out and Comvita in next Wednesday. All that Diligent cash looking for a new home and the billions of dollars of term deposit money rolling over this year and people will be offered two point something percent, less tax. You reckon some of that might find its way into the market ! NZX50 at 7,000 points by year end including growth already baked in from dividends payable for the rest of the year starting to look like a walk in the park. Who would have thought that two months ago !!

Maybe it is a little different this time with interest rates headed to 100 year lows...

[Baa_Baa]

She's on a pretty steep climb....

Of all the TA indicators I like, Twiggs Money Flow (TMF) is the only one on all my charts regardless of timeframe, because it is just uncannily reliable at indicating sentiment (follow the money). On March 14th TMF topped out and since then has been down trending in divergence with the NZX index.

[winner69]

Sure is mate. Diligent out and Comvita in next Wednesday. ...

Need to drop HBL out - that would improve the index as well

[Beagle]

If we did that and included SCL instead, 7500 on the index by year end would be game on :)

[trader_jackson]

well almost at that 7000 mark now, it seems we were all wrong (so far..?) even the top result of 6500 was no where near high enough!

[Baa_Baa]

Don't forget the guess date, 31 Dec 2016. Markets move, we could be all wrong like you say, only 5 months in, but save it for the date.

[couta1]

well almost at that 7000 mark now, it seems we were all wrong (so far..?) even the top result of 6500 was no where near high enough! Um the top option chosen by axe is OVER 6500 by the way.

[sb9]

Well we're up and away 7000+ mark on the index....

[Lewylewylewy]

http://www.sharechat.co.nz/article/ca8df5e3/anz-westpac-impose-new-restrictions-on-overseas-property-buyers.html?utm_medium=email&utm_campaign=ANZ%20Westpac%20impose%20new%20restri ctions%20on%20overseas%20property%20buyers&utm_content=ANZ%20Westpac%20impose%20new%20restric tions%20on%20overseas%20property%20buyers+CID_bd71 79926c93248ee711f706662fa20c&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticleca8df5e3anz-westpac-impose-new-restrictions-on-overseas-property-buyershtml

Banks have a lot more info than the rest of us, but will often take as much profit as they can, while they can...

Is this an early indicator of a busy that will create a market crash (housing then onto shares)?

[trader_jackson]

http://www.sharechat.co.nz/article/ca8df5e3/anz-westpac-impose-new-restrictions-on-overseas-property-buyers.html?utm_medium=email&utm_campaign=ANZ%20Westpac%20impose%20new%20restri ctions%20on%20overseas%20property%20buyers&utm_content=ANZ%20Westpac%20impose%20new%20restric tions%20on%20overseas%20property%20buyers+CID_bd71 79926c93248ee711f706662fa20c&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticleca8df5e3anz-westpac-impose-new-restrictions-on-overseas-property-buyershtml

Banks have a lot more info than the rest of us, but will often take as much profit as they can, while they can...

Is this an early indicator of a busy that will create a market crash (housing then onto shares)?

They are following what they did in Australia (and have been doing for a few months at least I believe)... no slowdown in the housing, sharemarket or the economy there right now!

[troyvdh]

TJ...are you nuts...look at the NZ 50 index...quite a steep curve yes..like you sound quite jubilant ...even euphoric...mate...they are warning signs...I been there mate...

[sb9]

Just putting this out there for perspective re the BREXIT scenario with referendum to take place next Thursday Jun 23rd, wonder how this will impact markets overall?

[Beagle]

Feels to me like the market has run out of puff. Seems harder to me to get gains. Market has a whole feels fully priced. Maybe the bear will start gnawing away at one's portfolio now ? 7,000 effectively full and fair value folks, what's your thoughts ?

[Lewylewylewy]

I think it's dropping away, but if you have some particular decent companies, you'll be fine providing there isn't a general collapse.

[Jinx]

After the Orlando tragedy plus Brexit concerns I think it'll be a rough week.

[sb9]

After the Orlando tragedy plus Brexit concerns I think it'll be a rough week.

Sure it is and started off with Asian markets sell off, just so happens ASX is closed....I suspect tomorrow will be key!!!

[trader_jackson]

Its already well over what about 98% of us thought, so I wouldn't be surprised with a slight pull back (possibly gradual or sudden, but I am leaning towards gradual) or some stagnation from this point (which may have already begun).

What is more interesting for me, will be to see what shares are hit hardest

[trader_jackson]

Well... over the big 7400 mark today... instead of the limbo, rather than how low can it go, the question seemingly being asked now is the opposite: how high can it go?

(It seems the categories needed to go much higher to be more realistic... Brexit, what Brexit?;))

[Beagle]

Approx six months since I started this thread. Amazing how things have changed. I think the main difference is a global environment in which we're looking at the lowest interest rates ever and no sign of that changing in the foreseeable future. In that environment lower investment yields / higher PE's are warranted due to risk free rates being at record low level's. I don't think the market per se is overheated, some stocks possibly are.

[blackcap]

Can the NZ market go down in the medium term?

I do not even think it is possible that the NZ Gross index falls over a term of a few years. Look at the 5 year chart and where is all the fuss we where talking about 6 months ago? It just looks like a small blip.
I know during the GFC we did drop appreciably but even that seems like a long time ago. With the high yeilding blue chips that the NZ market has, its hard for the bear to get his claws in.
Conversely the NZ Capital index would be very interesting to see. My bet it would look a bit like the Australian market, or even worse as our stocks pay higher dividends.
As to where the market will be at the end of the year? Could it break the 8000 barrier?

[Beagle]

Could it break the 8000 barrier?

Funny, I was pondering that very question myself this morning. No question at least one more cut to by the Reserve bank this year, possibly two...certainly underpins the whole dividend yield story of the NZX that's for sure.

No all that many countries have a version of our imputation system, fortunately we do :)

[Beagle]

One thing I think many of us underestimated, (including myself), was the amount of new money coming into the market every month from Kiwisaver. Those funds have to try and get a return somewhere.

[blackcap]

One thing I think many of us underestimated, (including myself), was the amount of new money coming into the market every month from Kiwisaver. Those funds have to try and get a return somewhere.

I have had this very discussion with a friend for a while now. We believe there are still gross KiwiSaver inflows as the program is still in its infancy. So the NZ market will be getting a huge chunk of this which really means the NZ market in the mean term just cannot go down. (being a bit binary there but that is the effect it will be having)
Lets say the average wage at 60,000 and Kiwisaver contributions at 3%. THats $1800 PA per contributor. Add the govts $500 makes that $2,300.
Multiply this by 1,000,000 Kiwisaver contributors (conservative figure) and we have $2.3 Billion entering the market per year from the KS. Not inconsequential I think.

[Beagle]

I have had this very discussion with a friend for a while now. We believe there are still gross KiwiSaver inflows as the program is still in its infancy. So the NZ market will be getting a huge chunk of this which really means the NZ market in the mean term just cannot go down. (being a bit binary there but that is the effect it will be having)
Lets say the average wage at 60,000 and Kiwisaver contributions at 3%. THats $1800 PA per contributor. Add the govts $500 makes that $2,300.
Multiply this by 1,000,000 Kiwisaver contributors (conservative figure) and we have $2.3 Billion entering the market per year from the KS. Not inconsequential I think.

Good post mate, well said. Perhaps not binary but I catch your drift, its certainly a supportive environment for equities in much the same was as a forecasted OCR this time next year of 1.5% is.
With low worldwide growth and ultra low interest rates looking likely to be here to stay and not a meaningful shred of foreseeable inflation as far as the eye can see barring some sort of major exogenous shock it appears the risk profile to the market is fairly benign. BTW, aren't we up to somewhere about two million Kiwisaver members now ?

[Hoop]

I have had this very discussion with a friend for a while now. We believe there are still gross KiwiSaver inflows as the program is still in its infancy. So the NZ market will be getting a huge chunk of this which really means the NZ market in the mean term just cannot go down. (being a bit binary there but that is the effect it will be having)
Lets say the average wage at 60,000 and Kiwisaver contributions at 3%. THats $1800 PA per contributor. Add the govts $500 makes that $2,300.
Multiply this by 1,000,000 Kiwisaver contributors (conservative figure) and we have $2.3 Billion entering the market per year from the KS. Not inconsequential I think.

Interesting scenario and a good discussion topic on its own..As I always said on ST... the cyclic bull market relies on the ample supply of "available money"...

[blackcap]

Good post mate, well said. Aren't we up to somewhere about two million Kiwisaver members now ?

We probably are but I was being conservative and there will be a few of the older generation now taking out their funds so I just used 1 million as net inflow. Very back of envelope stuff but was more to illustrate.

[Arbroath]

I have had this very discussion with a friend for a while now. We believe there are still gross KiwiSaver inflows as the program is still in its infancy. So the NZ market will be getting a huge chunk of this which really means the NZ market in the mean term just cannot go down. (being a bit binary there but that is the effect it will be having)
Lets say the average wage at 60,000 and Kiwisaver contributions at 3%. THats $1800 PA per contributor. Add the govts $500 makes that $2,300.
Multiply this by 1,000,000 Kiwisaver contributors (conservative figure) and we have $2.3 Billion entering the market per year from the KS. Not inconsequential I think.


I'd argue Kiwisaver is inconsequential. Compulsory super contributions in Australia are much larger and it hasn't helped the ASX300 the past 3-4 years. Also out of your $2.3b figure assuming its the number only 5-10% would end up in NZ equities, much more goes offshore or to fixed interest. Lastly, the driver of the NZ market imho is offshore money chasing yield - offshore ownership of the NZX50 has gone from 30-35% to 50-55% in the past 2 years - that's what people, myself included, underestimated - the amount and persistence of yield chasing going on.

[Beagle]

I'd argue Kiwisaver is inconsequential. Compulsory super contributions in Australia are much larger and it hasn't helped the ASX300 the past 3-4 years. Also out of your $2.3b figure assuming its the number only 5-10% would end up in NZ equities, much more goes offshore or to fixed interest. Lastly, the driver of the NZ market imho is offshore money chasing yield - offshore ownership of the NZX50 has gone from 30-35% to 50-55% in the past 2 years - that's what people, myself included, underestimated - the amount and persistence of yield chasing going on.

Yield chasing a huge factor no question but I would have thought the allocation to N.Z. equities would be higher than 5-10% of the average Kiwisaver portfolio given woefully low bond rates.

[blackcap]

I'd argue Kiwisaver is inconsequential. Compulsory super contributions in Australia are much larger and it hasn't helped the ASX300 the past 3-4 years. Also out of your $2.3b figure assuming its the number only 5-10% would end up in NZ equities, much more goes offshore or to fixed interest. Lastly, the driver of the NZ market imho is offshore money chasing yield - offshore ownership of the NZX50 has gone from 30-35% to 50-55% in the past 2 years - that's what people, myself included, underestimated - the amount and persistence of yield chasing going on.

I take your point about not all the money going into equities as such and some goes overseas as well. Surely more than 5-10% goes to NZ equities though. And as for Australia, has their system not been going for much much longer such that outflows would equal inflows? That is not the case in NZ.

[Baa_Baa]

Surely more than 5-10% goes to NZ equities though.

Here's the Westpac Kiwisaver Funds, 'Australasian Equities' allocations are not broken out into NZ and Aus splits, but it illustrates the fairly modest allocations to 'local' equities across the various funds types.
8273

[blackcap]

Cheers Baa baa, that picture does speak a 1000 words. Surprises me a bit, I thought more would be in equities, but guess I was wrong...

[Arbroath]

I take your point about not all the money going into equities as such and some goes overseas as well. Surely more than 5-10% goes to NZ equities though. And as for Australia, has their system not been going for much much longer such that outflows would equal inflows? That is not the case in NZ.

Hi Blackcap

Aussie system has been in existence for about 25 years. There is some drawdown by retirees but far more inflow from a much larger workforce. Think of all 18-60 year olds (its compulsory remember and currently c. 10% of wages, much higher than kiwisaver) - millions of workers v a few hundred thousand retirees drawing down on balances that only had 10-20 years of building phase and with lower historical contributions. Australia has lifted contributions from c. 6% at start I think to c. 10% now and are legislated to go to 12% over the next few years.

So my pure guess would be in Oz there would be $5 of inflows for every $1 of outflows. Be interesting if there is a report that can caste more light on that.

[Beagle]

Interesting times we live in. In February 2016 the favourite bet was the NZX50 would end the year below 5800.

Despite now being circa 6700, (which nobody picked) and all the uncertainty of Trumpageddon and interest rate increases and the market being up about 13% from its February low, the favourite bet in the recent poll I ran is for the market to kick on further, up 0-10% over the next 12 months. Hmmm.

Interesting psychological question. Did the market hitting an all time high of just over 7500 in September pre-condition people's expectations unrealistically going forward ?
Was the market ever worth 7500 ?

[Valuegrowth]

It is highly unlikely this index will go below 5800 by December unless become panic. Instead, I expect Santa rally and it should trade above 6500. 2017 is the year to watch. It may touch even 52 week high in 2017. I didn’t expect any interest rate hikes from FED or from Reserve Bank here in NZ. It is certain that FED may begin to raise interest rates gradually from 2017.

Many analysed paid attention to market situation from January to March to forecast outlook without understanding bigger picture. Can world stop easy money policy suddenly in a slow growth environment?

[Beagle]

https://www.nbr.co.nz/article/market-close-nz-shares-down-orion-health-kathmandu-fall-while-trademe-gains-b-196623

The market is firmly in correction territory, down more than 11% from its high of over 7500 in early Sept. If Trump starts acting like a chump I think its quite likely we'll go into a bear market in the short term, (bear, down by 20% or more). Maybe not by 31 December but if he starts throwing his weight around like a 700 pound gorilla in the new year, watch out !

Think Trump can't affect the markets ? Its already happening ! http://www.msn.com/en-nz/money/markets/trumps-opposition-already-paying-the-price/ar-AAkcpRc?li=AA4Zjm&ocid=spartandhp

[Baa_Baa]

https://www.nbr.co.nz/article/market-close-nz-shares-down-orion-health-kathmandu-fall-while-trademe-gains-b-196623

The market is firmly in correction territory, down more than 11% from its high of over 7500 in early Sept. If Trump starts acting like a chump I think its quite likely we'll go into a bear market in the short term, (bear, down by 20% or more). Maybe not by 31 December but if he starts throwing his weight around like a 700 pound gorilla in the new year, watch out !

Definitely correction territory imo, and not far off 20% decline on Fib retrace basis from lows 2009, although I know you mean arithmetic basis. It's far from an ugly chart, still nicely in both the 2012 and 2009 linear up trends (not shown on chart). But still a correction and uncertain what's driving the sell-off or where the bottom might be, though some strong technical supports (shown).

Oddly the DOW just went ballistic on the Trump win, whereas NZX extended losses. Go figure that one?

8449

NZX50 Weekly chart.

[Beagle]

Caught many by surprise I think Baa Baa, myself included but as you say our market was still down for the week overall on the back of many other down weeks since the Sept high. On the go figure question I think its companies like Caterpillar up ~ 10% since Trump's victory. Trump's plans for rebuilding of infrastructure boosting companies involved in that sector. Borrow and spend and when the debt mountain gets to big...

[arc]

Complex choice...
Trump in residence = nervous market and little positive outlook for NZ
If Trump announces "Trade " as a political agenda to be immediately addressed, effectively alienating China, then we will all see a Recession. (This one is on his First-100-days agenda). How he handles it will be interesting.


My pick NZX50 31-December 6300-6500
If trade sanctions are announced before 31 December, Chicken Little will come out to play.

Edit: Doing some number/data crunching, theres some interesting trend lines/correlations between Facebook and the election outcome.
I can see how the traditional polling methods got it wrong, phoning people to ask questions or door-knocking to get ticks on selection box's is now outdated. Facebook gets something like 42,000 posts per second.

[Valuegrowth]

NZ market was steady and went up today despite earthquake. Even NZD didn’t go down much. Currently it is having correction but we should see some kind of rebound sooner than later. Today NZ market didn't listen to quake it went up along with Japanese market and Chinese market.

[arc]

Marketwinner
Its a strange market.

[Beagle]

U.S. 10 year treasuries up 50 bps since Trump won, wiped $1trillion off bond investors portfolio value as reported by CNBC. If this continues and we see a fundamental shift in the risk free interest rate in the U.S. this sets the tone for more realistic PE's going forward.
http://www.cnbc.com/2016/11/14/donald-trump-blew-up-the-bond-market-and-changed-everyones-view-of-interest-rates.html

Panic in the housing market already, sharemarket next ?
http://www.cnbc.com/2016/11/14/trump-effect-pushes-mortgage-rates-to-4.html

[Valuegrowth]

NZ market is very steady today as well. Suddenly, out of the blue new trend has emerged in global markets. Investors or traders are looking for opportunities in badly beaten down markets and stocks instead of bond, gold and property market. Stock market is the place to be now.

[blackcap]

Hasn't the Dow had 6 or is it 7 straight up days since Trump took the presidency. Yes could be a shift from bonds to stocks. That US 10 year rates are up 50bp is insane.

[Valuegrowth]

Yes, DOW had 7 straight up days. Financials have been one of the biggest risers since the election. Energy and tech stocks also rebounded. After Nikkei 225, NZ market is also following DOW. Top traders, investors or funds are taking position in Asian emerging markets and frontier markets as well. There could be some rotation from bond and gold to stocks as well.

[Valuegrowth]

It is getting closer to 7000 now.

http://www.scoop.co.nz/stories/BU1611/S01048/market-close-nzx-50-rises-to-3-week-high.htm

MARKET CLOSE: NZX 50 rises to 3-week high

[Valuegrowth]

Finally it didn't go down below 6500 as at 31/012/16. Instead it reached 6,881.22. We can reasonably expect a target above 7000 in 2017.

Have a great new year for all members!