Your weekly market update: money could get cheaper, no lift expected to compulsory super rate

Money-update-ymyl

Hey gang, get up to speed on this week’s financial trends with my market updates. 

Interest rate could drop even further

Just when you thought money was cheap with such low interest rates on loans and savings accounts…it could be getting even cheaper.

Reserve Bank deputy governor Guy Debelle was this week talking at a conference and discussed the possibility of official interest rates dropping from the current 1.5 per cent to 0-0.5%. 

He spoke about the levers the RBA has if the global economy heads towards recession.

It’s safe to say interest rates are not going to rise anytime soon.

No change to compulsory superannuation levels

There has been lots of talk about lifting compulsory superannuation contributions from the current 9.5 per cent…with some wanting it to go to 12 per cent.

Liberal MP Jason Falinski told a financial services conference that behind closed doors there is no interest within the Government to lift the compulsory superannuation rate.

How are the profits of our listed companies going

There are still a few days to go in this profit reporting season but, overall, Commsec says companies are struggling.

Of the companies which have reported so far, 93.6 per cent did make a profit… near the high of 94.4 per cent recorded in February 2017. But only 53.2 of companies were able to lift profits. 

Aggregate statutory profits are also up only modestly… just 4.7 per cent. But if BHP is excluded, profits are actually lower by 5.1 per cent.

Despite the tough conditions, more companies are still paying dividends. The 90.8 per cent of full-year reporting companies that elected to pay a dividend was the highest in three years and above the average of 86 per cent over the 19 reporting seasons covered by Commsec.

The Dow Jones Google Index

I love quirky financial barometers. How’s this for a good one.

There has been a 28 per cent rise this week in the number of Americans Googling the term “Dow Jones”.

It’s an interesting index which indicates Main Street USA is worried about the economy… and often is a precursor to lower retail sales. But this increase is still 14 per cent down on the peak Dow Jones “googling” during the sharemarket crash of last December.

I told you it was quirky.

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