Nine finance editor Ross Greenwood said while a record stock market is positive, there is still a lot of uncertainty over Australia’s economy.
“You still have firms really concerned, you still have house prices not moving and you have the messages coming out the Reserve Bank for goodness sake - they are saying they are worried about the economy and considering cutting interest rates again,” he told Today.Mr Greenwood said he doesn’t expect stock brokers and investment firms to celebrate until full yearly results have been disclosed by companies.
“If company profits are disappointing or if they have outlooks that are not so good, many of these companies that have sent the Australian stock market to record highs are going to come crumbling down very, very quickly,” he said. “The big issue is whether the stock market pricing is in a better future economic outlook for Australia or whether it’s actually something where the stock market – with the falling interest rates – has got ahead of itself.”
Mr Greenwood said the stock market has risen because people have chased high returns from dividends of companies, but it could spell trouble if profits don’t stand up the evaluation of shares.
Record highs on the stock market mean nothing. When Australians can't pay their way, can't afford medication. Can't afford to pay high ridiculous rents,with some families living rough in their car.Over a million kids have no proper home.