4 Reasons Why You Might Struggle To Make A Profit In Your Business

So...how profitable is your business? We hope you are making a success of your operation, but if you are barely making a profit, or if (dare we say it) making more losses than financial gains, then...

News Company - avatar News Company

Inducing consumer paralysis: how retailers bury customers in an avalanche of choice

Three decades of behavioural experiments show consumers given too many choices are more likely to make a bad or no choice.www.shutterstock.comDo you think you are paying more than you should for energ...

The Conversation - avatar The Conversation

Quantum physics experiment shows Heisenberg was right about uncertainty, in a certain sense

Quantum particles are not really just particles... they are also waves.Shutterstock/agsandrewThe word uncertainty is used a lot in quantum mechanics. One school of thought is that this means there&rsq...

Howard Wiseman, Director, Centre for Quantum Dynamics, Griffith University - avatar Howard Wiseman, Director, Centre for Quantum Dynamics, Griffith University

Setka furore opens division within the labour movement – and there is no easy solution

Setka has form in attracting negative media attention as Victorian state secretary of the Construction, Forestry, Mining, Maritime and Energy Union.AAP/Daniel PockettJohn Setka’s reported commen...

Ray Markey, Emeritus Professor, Macquarie University - avatar Ray Markey, Emeritus Professor, Macquarie University

VIDEO: Michelle Grattan on John Setka, press freedom, Adani approval and tax

Opposition leader Anthony Albanese has called for John Setka to be expelled from the Labor Party.AAP/Bianca de MarchiMichelle Grattan talks with University of Canberra Deputy Vice-Chancellor and Vice-...

Michelle Grattan, Professorial Fellow, University of Canberra - avatar Michelle Grattan, Professorial Fellow, University of Canberra

Built like buildings, boab trees are life-savers with a chequered past

A boab tree in the Kimberley. Boab trees can live for thousands of years and their trunks hollow out as they get older. ShutterstockSign up to the Beating Around the Bush newsletter here, and suggest ...

Gregory Moore, Doctor of Botany, University of Melbourne - avatar Gregory Moore, Doctor of Botany, University of Melbourne

Proposal to mine fossil-rich site in New Zealand sparks campaign to protect it

Foulden Maar formed 23 million years ago and contains tens of thousands of fossils of extinct plants and animals.Supplied, CC BY-NDAn Australian company’s application to mine a fossil-rich site ...

Nic Rawlence, Lecturer in Ancient DNA, University of Otago - avatar Nic Rawlence, Lecturer in Ancient DNA, University of Otago

'People felt totally trapped': what it's like to be a pensioner renting privately as Australia's housing costs soar

Older private renters are far more likely to experience loneliness than their counterparts in social housing and that loneliness can be acute.ShutterstockA growing number of older Australians don&rsqu...

Sunanda Creagh, Head of Digital Storytelling - avatar Sunanda Creagh, Head of Digital Storytelling

How a cyber attack hampered Hong Kong protesters

Massive public protests taking place in Hong Kong over the past week are aimed at a new extradition law, known as the Fugitive Offenders Ordinance, that would see accused criminals extradited to mainl...

Stanley Shanapinda, Research Fellow, La Trobe University - avatar Stanley Shanapinda, Research Fellow, La Trobe University

Research Check: is white meat as bad for your cholesterol levels as red meat?

Whether you're eating red meat or white meat, a lean cut is the healthier way to go.From shutterstock.comYou’ve probably heard eating too much fatty red meat is bad for your health, while lean m...

Clare Collins, Professor in Nutrition and Dietetics, University of Newcastle - avatar Clare Collins, Professor in Nutrition and Dietetics, University of Newcastle

Inside the story: the all-knowing narrator in Kim Scott's Taboo

View from a highway rest stop east of Ravensthorpe, Western Australia. In Kim Scott's Taboo, the landscape becomes a narrator.Chris Fithall/flickr, CC BYWhy do we tell stories, and how are they crafte...

Julienne van Loon, Vice Chancellor's Principal Research Fellow, School of Media & Communication, RMIT University - avatar Julienne van Loon, Vice Chancellor's Principal Research Fellow, School of Media & Communication, RMIT University

Adani is cleared to start digging its coal mine – six key questions answered

There is now nothing standing between Indian mining giant Adani and the coal buried in Queensland’s Galilee Basin.By approving the Adani’s groundwater management plan on June 13, the Queen...

Adrian Werner, Professor of Hydrogeology, Flinders University - avatar Adrian Werner, Professor of Hydrogeology, Flinders University

Vital Signs: the RBA's marching orders are no longer realistic. They'll have to change

Every few years, the government hands the Reserve Bank a new set of instructions.ShutterstockA somewhat obscure fact about the marching orders for Australia’s Reserve Bank is that, usually, when...

Richard Holden, Professor of Economics, UNSW - avatar Richard Holden, Professor of Economics, UNSW

Friday essay: Barry Humphries' humour is now history – that's the fate of topical, satirical comedy

Dame Edna Everage at Melbourne Town Hall in 2006 after being presented with the Key to the City. Simon Mossman/AAPLet’s face it, Thursday evenings on ABC television are not quite the same any mo...

Anne Pender, Professor, University of New England - avatar Anne Pender, Professor, University of New England

The coalition’s shock victory pushed up the S&P ASX 200 1.7% in the biggest surge since Kevin Rudd was elected prime minister in 2007.

The ASX 200 measures the price of Australia’s 200 biggest public companies. The jump pushed up the value of shares across the entire market by A$33 billion. The price of one of the banks jumped 9%.

All of the polls leading up to the election had Labor ahead, with Labor apparently widening its lead in the final few days.

Punters placing bets also overwhelmingly favoured Labor. Sportsbet was so confident of a Labor victory, it paid out bets on Labor early.

Which means the market jumped in surprise first thing on Monday.

It had been expecting a Shorten victory, and had to suddenly reprice after discovering it had been a Morrison victory.

ASX 200, May 14 to May 20. Yahoo Finance

It didn’t jump for other reasons

It’s pretty clear that the jump didn’t reflect anything else, for two reasons:

  • it is surprises that move markets, because everything else is priced in, and the coalition victory was just about the only surprise over the weekend

  • we are able to compare the ASX movements with those on other markets ahead of it opening. The ASX normally follows other markets unless there is a clear local reason to do otherwise. In this case, the related market indexes in the United States, Britain and Canada had all fallen in their most recent sessions before the ASX opened. By contrast, the ASX indexes jumped sharply, suggesting a very strong positive reaction to only big piece of local news around on the day

Others down, Australia up

Returns on Friday May 17 in the US, Canada and UK, on May 20 in Australia. Red = foreign indexes. Green = Australian indexes

Why such a strong reaction?

It’s hard to be sure, and different government policies affect different industries differently. But there are common threads:

Property effects: Labor’s capital gains tax and negative gearing tax policies might have hurt property prices.

The prospect of prices somewhat stronger than they might have been might help arrest the decline in construction which might help generate employment, which might boost economic growth. Stronger prices bolster consumer confidence and support spending. They can also support it directly as people tap into equity from their homes.

Tax factors: The market generally reacts well to tax cuts. This was the case in the US as Trump’s tax cuts became increasingly likely. This is due in part to the expectation that they would boost the economy. The market generally dislikes tax increases. While it is not clear whether the Coalition’s promised longer-term tax cuts will materialise, they have plans for them that Labor didn’t.

Labor’s dividend imputation policy would have harmed retirees’ incomes. With it off the table they can spend and hold shares had they had before.

Banking and finance: The coalition is generally seen as more concilliatory towards the banking sector, being reticent to impose major penalties following the royal commission, and disinclined to commence it to begin with. The share price of big four banks increased significantly: from 6.27% for the Commonwealth through to 9.21% for Westpac.

Mining and energy: Labor was perceived as hostile to mining and resource companies. Several recorded strong price gains. Its seeming reluctance to acknowledge the costs of its climate change policies can’t have helped.

We can’t know for sure

Other factors might include the Coalition’s approach to infrastructure and to unions, which are generally business friendly.

Often markets react to what they think markets will do, rather than to anything real. But it’s fair to say that, to start with, they are feeling better.

Authors: The Conversation

Read more http://theconversation.com/going-up-monday-showed-what-the-market-thinks-of-morrison-117396