'Sudden changes' to tax policy could lead to property prices falling, says Michael McCarthy

Описание: Moomoo Australia chief executive Michael McCarthy believes "sudden" changes to tax policy and what he sees as a negative economic environment for property investors could see a "very significant correction" in property prices. "And while there's a lot of confidence at various levels of government that we'll only see a modest pullback, if at all, the potential for a significant drop in house prices is very real."

The S&P/ASX 200 gained 119 Friday or 1.37 per cent to close at 8,844 points. Healthcare, mining and bank stocks all performed well. We saw investors more broadly move back into stocks later in the week on expectations expressed by US traders that the US Federal Reserve would not need to hike interest rates this year. It followed employment data showing fewer jobs were created in the US in June. But Mr McCarthy said it's a mistake to think US inflation could fall, or will not stay elevated, because the jobs market looked weaker in June. "Inflation remains well above target and is trending upward. And under that scenario, it really wouldn't matter how weak employment data was, the Fed is still likely to hike to choke off that inflationary spiral that's emerging." Michael McCarthy argues the stock market is showing herd behaviour at present, rather than following the fundamentals of company valuations. "And that's the notion that the animal spirits of the economy and of investors are driving the market." He said.

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The benchmark ASX 200 index gained 0.9 per cent for the week.
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