My thoughts only. IF interest rates stay the same ?…. Well…… If interest rates go down, I think it will benefit the home owner and without doubt those companies with high debt levels… but those debt instruments are not going to react immediately. Those REITS with offices, are not going to improve dramatically, or are those that are going hell for leather building data centres. it’s going to affect selectively and positively on those companies that already have good fundamentals, are in the right sector and location. Most REITs are trading at a significant discount for a variety of reasons although there are those trading below NTA for reasons of sentiment only. Re equities ? A drop in rates (I think) will not inspire those already coping with tough times to lash out on the market. The people with money ie boomers, will be cautious and if interest rates drop, will be earning less $ on cash investments. The PEs of Oz companies are fairly high, and to improve the quality of companies, they need to improve the earnings part of the equation to reduce or justify the PE. There are probably a lot of retirees with time on their hands and money in their pockets, but they are probably older, wiser and savvyer than their junior counterparts and will be less likely to part with their hard earned. Those investors are probably already investors in the market, have seen their quality portfolio rise and will probably be more likely sellers near the top, rather than buying near the top. So…. I see quality companies with quality or innovative products continuing to rise on their merits, and other companies providing the essentials will continue to plod along, but I don’t see (a reduction in) interest rates being a significant factor in the near future in any significant market increase. Particularly with World events as they are… elections, unemployment increasing, energy, interest rates, geo political events, climate events etc. not that we haven’t had all these before, it’s just that I think the markets are reasonably high and that a small reduction in interest rates will not impact equity markets to a significant event. It’s earnings that will do that ! These words may come back to bite me, but let’s see ! Happy to be corrected….
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