Tread Warily

Peter Esho, Chief Market Analyst at City Index in Sydney, Australia, discusses: - Light week ahead for US economic reports - final major week of the earnings season - implications - stock market bulls; - The Dow and S&P 500 are a short hop from all-time highs and recent data has been spotty. While January's ISM manufacturing data was stronger than expected, nonfarm payrolls were a little light of expectations. Meanwhile, jobs growth seems interesting though this was tempered by the surprise GDP contraction and worries over the "fiscal cliff".How do u interpret this seemingly contrasting data? - And what’s your view on how US stocks will behave: more upside or time to take some cash out of the till? - Jobs watch - implications - QE4; - There are broad expectations that Australia's central bank, which holds its first policy meeting of the year today, could deliver a surprise interest-rate cut to underpin the economy and lower the Aussie dollar. What’s your view? - The Reserve Bank of Australia (RBA) lowered interest rates by 125 basis points last year, taking its benchmark interest rate to 3 percent, amid a weakening labor market and prices of some key commodities Australia exports. - Its latest move was a quarter-point cut in December and was recent enough for many economists to say the RBA will hold its fire this month. Markets put the chances of a rate cut this week at just 18 percent - Do you share some views that with inflation still benign and data still pointing to weakness in some sectors of the economy, the Australian economy is generally much weaker than many people expect? - And then there are the elections, the Sept 14 date of which you have been dismissive of, saying it was only natural that Labour would go as far into their term as they could. Nonetheless, the big catalyst Aussie markets want to see resolved is the political instability wrought by a hung parliament. That’s meant legislation has been so difficult to pass through. With Labour so far behind in the popularity stakes do u see this uncertainty clearing up come Sept 15. See omnystudio.com/listener for privacy information.