Local sharemarket and Aussie dollar see gains

In finance, both the local sharemarket and the Aussie dollar saw gains today. Alan Kohler provides more details.

Transcript

00:00Jackson Hole kicks off tomorrow.

00:05That's the name of the annual symposium of central bankers and economists hosted by the

00:09Federal Reserve Bank of Kansas City in a valley in Wyoming called Jackson Hole, which is a

00:15thousand miles from Kansas City.

00:17But it looks like this, which is a bit nicer than the biggest city in Missouri.

00:22All eyes will be on the speech by Fed Chairman Jerome Powell, and he's expected to confirm

00:26that US interest rates are about to be cut.

00:28So the US dollar has been weakening ahead of Jackson Hole, which is why the Aussie dollar

00:32has been rising and went up again today.

00:35And gold has been rising as well to a new record high last night, partly because of

00:39the weak US dollar, but mainly because of Chinese buying, both by the People's Bank

00:44of China avoiding US treasuries and private Chinese investors avoiding the collapsing

00:50property market.

00:51This is the third great gold bull market since the link between the US dollar and gold was

00:57broken by Richard Nixon on August the 15th, 1971, in what is known as the Nixon shock,

01:04finally ending the backing of money by gold.

01:08And this chart from Bloomberg today is quite interesting.

01:12It's the main US share market index, the S&P 500, expressed in gold rather than dollars.

01:17Now, well, it's the same as it was in 1971.

01:22The S&P 500 ended its seven-day winning streak last night, but the Aussie market did not.

01:27The streak goes on, nine days now.

01:30I don't think there's been one of those since 2016.

01:34Today's big profit season winners were finance company Hum Group and tech business WiseTech,

01:39whose founder, CEO and largest shareholder Richard White made an extra $1.7 billion today.

01:47And that is definitely finance.