Market Rally Nearing “Nosebleed” Territory

10.01.2017 • Investing

Kris Sayce – Port Phillip Insider (Australia) –

A headline from Bloomberg: ‘Australia Bank Rally Sends Valuations toward Nosebleed Territory’.

The story continues:

Australian financial shares have jumped as much as 20 percent since Nov. 9, when Donald Trump’s surprise victory triggered a surge in global bank stocks amid a wave of optimism that global growth will improve. An index of the four biggest banks in Australia — Westpac Banking Corp., Commonwealth Bank of Australia, National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd. — reached the highest level since August 2015 on Monday.

They’ve got that right. It’s just about the biggest rally since the 2012–13 dividend rally. That was when all dividend-paying stocks shot up in value after the Reserve Bank of Australia (RBA) hinted that interest rate cuts were on the cards.

But this rally is different.

At least the 2012–13 rally was the direct result of an Australian influencer — the RBA.

But this rally is the result of the wittering of a New York real estate businessman. Granted, he’s a New York real estate businessman who happens to be the next US president…but still.

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