The Reserve Bank of Australia (RBA) yesterday released the minutes for its July meeting which referred to "only moderate growth in employment" and easing household consumption growth, indicating that interest rates will likely remain stable for some time yet.
However, Goldman Sachs is of the belief that the RBA could actually drop interest rates as low as 2.25% by September. While most other analyst and brokerage firms predict that the next rate movement will be upwards, Goldman Sachs has cited sluggish economic growth, slower mining export growth and household wage pressures as just a few reasons why rates may need to be cut further.
If that were to happen, it is likely we will see further rises in the Aussie share market to compensate for the low interest rate environment – the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) might reach 6,000 points after all! Here are three stocks to consider buying now to benefit from even lower rates.
Super Retail Group Ltd (ASX: SUL) is one of Australia's dominant retailers which, until recently, managed to achieve strong earnings growth despite the strong headwinds buffeting the industry. The stock has taken a huge hit recently though, in part thanks to declining consumer confidence due to the government's horror budget. However, lower interest rates would help regain that confidence which could see Super Retail Group recover very nicely.
Lower interest rates would likely also see credit growth continue to expand, which would benefit data analytics company Veda Group Ltd (ASX: VED). As more individuals and businesses apply for credit, Veda's products can be used to confirm their identity and credit risk. Now seems like a particularly good time to buy, considering the shares are sitting nearly 24% below their March 52-week high at just $1.96 apiece.
Telstra Corporation Ltd (ASX: TLS) may also become a target of those hungry for solid dividend yields. While the telecommunications behemoth offers growth prospects both domestically and internationally, it also offers a juicy 5.4% fully franked dividend yield, which is certainly more appealing than 'risk free' returns from term deposits or government bonds.
