Market Commentary – January 2015
The situation in Greece is worrying and the potential knock on effect to the rest of the world cannot be underestimated. If their banks are allowed to fail, Europe will bear the brunt of the crisis but in this global economy no country will be truly safe from any repercussions.
Meanwhile, back in NZ, farmers are facing challenging times. While many of us have been basking in the glorious weather, our farmers have desperately been praying for rain. It makes you wonder if there will be any respite for them.
The kiwi dollar has jumped around again but the Reserve Bank has held the OCR at 3.5. It certainly appears that the Reserve Bank have taken the right approach but only time will really tell if that is true. It will be interesting to see how the housing market responds. There are certainly parts of the country where housing is overpriced and, for most people, unaffordable. How long this state of play can continue is anybody’s guess. If the bubble does burst, the knock on effect to home owners and the building industry will be massive.
Meanwhile, both Facebook and Apple have announced massive profits (again) with Apple selling an incredible 74.5m iPhones in the 4th Quarter. If that doesn’t ignite further arguments over the size of their tax bill, nothing will. It was interesting to see Microsoft showing reducing profit forecasts but also intriguing to see both their new VR technology and the promise of a free upgrade to Windows 10.