The upwards trend of the XJO remains intact. After the strong...

The upwards trend of the XJO remains intact. After the strong rise at the end of last week, there was a good chance that it would fall backwards today. Instead, the XJO seems to be straining at the bit to go higher. Why?

Possibly because the media has led many to believe that interest rates will be falling soon. Many people, probably including most media hacks, have mortgages. The media concentrates on renters and people with mortgages, to the exclusion of others. And individuals at the RBA appear to be allowed to hold large property portfolios, with large borrowings. So there is no surprise that interest rates are low relative to other countries and no surprise that the RBA's inflation target is higher than other countries. With interest rates already low, and with property prices and rents heading into the stratosphere, it is always interesting to see the RBA spin.

Or maybe the XJO is just following USA markets.

Anyway, most people including media hacks and economists are expecting interest rates to start falling soon. So, stocks with good dividends become more attractive relative to bank deposits. So, money flows into the XJO.

What could spoil the party for the XJO? Another global crisis? Considering current world events, it would take something relatively enormous. USA domestic events? Considering current USA events, such as presidential candidate dramas, it would take something relatively enormous. If inflation rises in Australia? Bingo. This could cause a 25 point rise in interest rates. Three weeks until the next quarterly inflation figures are released.