Since January 9th 2017 peak Does anyone have a short or long term forecast? Any one want to have a crack at a reason for the drop? Sector breakdown based on market capitalisation. Financials - 33.4% Materials - 16.4% Real Estate - 8.3% Industrials - 7.6% Health Care - 7.1% Consumer Discretionary - 6.5% Consumer Staples - 6.5% Energy - 4.9% Telecommunication Services - 4.7% Utilities - 2.8% Information Technology - 1.9% Financials - 33.4%, This is scarey
MC for financials is important, but when you consider that the four big banks comprise a big majority of the sector and the ASX200, the effects of changes up and down are magnified. I forget now the exact percentage but you can easily search and calculate it, looking at ASX 200. The Big Four and a good deal of the other financials are very heavily weighted in RE, so a fall in RE = a large fall in major financials, in turn weighing the sector down. I would have though major metropolitan markets are pretty extreme, but nothing seems to matter. The income to price ratio is now very high in the biggest cities. Materials is meeting resistance if you look at the 10 year graph. BHP has doubled in the last 12 months. I can remember when Motley Fool ran an article when it was about 13 bucks saying it was a bad buy and had plenty more to fall. It doubled. It is still almost half of its high in 2007-8. Our economy is tied heavily to China, our main customer for materials, as well as a large RE and "education" user (as a pathway to residency). What is scarier is industrials being so small a sector of our economy imo...not a big buffer Let's hope MAGA is good for us (and our customers).
