The economy & shares September 2014

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Running Time: 11:16

Date: 01/09/2014

Economic indicators are mixed at the moment. So what's the real state of the economy and the sharemarket?

While the Government continues its grind to have the Federal Budget passed into law, we ask CEO of Lincoln Stock Doctor and economist Elio D'Amato for his review of both the economy and the sharemarket. Starting with the economy, Elio says that although consumer sentiment and other indicators point to an increase in confidence, it's still a challenging landscape which requires businesses to become more creative.

Elio doesn't expect the RBA to increase interest rates while the Aussie dollar remains strong, but if our currency does weaken in the next 12 months, be ready for rate increases in the not too distant future.

In sharemarket news, another reporting season has come and gone with very few surprises. There were, however, some disappointments from QBE, Newcrest and JB Hi-Fi. On a PE basis, the market is quite expensive but dividend income remains strong and the short term outlook is positive for the rest of 2014.