Welcome to Thursday. Here are the five things I'm looking at today on the Australian sharemarket.
- The S&P/ ASX 200 Index (Index: ^AXJO) (ASX: XJO) has opened 0.4% higher, as US indices tracked higher. The Dow Jones closed up 0.2%, while the S&P 500 gained 0.1% and the NASDAQ 0.2%.The US Federal Reserve says it still intends to keep rates low for some considerable time, but did raise its forecast for the fed funds rate at the end of 2015 to 1.375% from 1.125% in June 2014.
Credit Suisse analysts said that equities are 'abnormally cheap', compared with other asset classes, and predicted the S&P 500 would advance to 2,050 by the end of this year. It's currently at 2,001.
- The Aussie dollar has dropped below 90 US cents, and its lowest level in six-months, following statements by the US Federal Reserve that the central bank could begin to raise interest rates as early as next year.
That's good news for Australia's exporters and may provide some relief to our beleaguered iron ore miners.
Interestingly, according to research by K2 Asset Management, rising interest rates doesn't automatically mean equity markets will fall. In fact, they say that when bond yields move up by more than 75 basis points, equity markets generally rally.So there you go Fools, if interest rates do rise, the current bull market is likely to continue. - Arrium Limited (ASX: ARI) the steelmaker and iron ore producer has seen its share clobbered down 34% to 42.7 cents, after the company came out of a trading halt, following the completion of its $465 million institutional placement. Arrium wants to raise $754 million to repair its balance sheet, and repay debt.
- Tweet of the Day
I'm interviewing William Thorndike tomorrow. Any lovers (or haters) of The Outsiders have any questions?
Joe Magyer (@Magyer) September 17, 2014
Our own Joe Magyer interviews William Thorndike, author of the Outsiders, which happens to be one of Joe's favourite investing books. - Stock of the Day – brought to you by Aryan Norozi – is actually three growth companies, Capitol Health Ltd (ASX: CAJ), G8 Education Ltd (ASX: GEM) and Greencross Limited (ASX: GXL). I own two of them – and you might want to find out what Aryan thinks of them here.
If you're into tech stocks, you can also catch up with our latest report and one exciting tech stock below…
