The best and worst performing shares this week

New Zealand's Reserve Bank has taken a bold step, slashing rates by 50 basis points to 4.25% - its third cut in just four months.

Meanwhile, interest rates in Australia hold firm at a decade-high 4.35%. This stark policy divergence highlights contrasting global economic realities and raises a critical question: is the RBA too cautious, prioritising restraint over relief?

New Zealand's rationale is straightforward. After two consecutive quarters of negative GDP growth, the country is in a technical recession.

Inflation has eased to within the central bank's target, but weak economic activity demands decisive action. Governor Adrian Orr framed the cuts as essential for closing the "output gap" and jump-starting growth.

In contrast, Australia remains hesitant, despite clear signs of household distress under the strain of high interest rates and soaring living costs.

Inflation has cooled to 2.1%, thanks in part to government subsidies on electricity and falling fuel costs.

However, the RBA's preferred trimmed mean inflation remains elevated at 3.5%, pointing to persistent underlying pressures.

Rising rents, stubbornly high food prices and stagnant wage growth are squeezing household budgets, particularly for younger mortgage holders.

Adding to the complexity, the upcoming Black Friday and Cyber Monday sales are expected to skew spending data.

Australians are projected to spend $12.7 billion during these sales, but this isn't a sign of economic resilience. Instead, it reflects financial strain, as consumers wait for discounts to afford essential purchases.

As Greg Jericho from the Australia Institute aptly observes, "If we are not able to sustain spending unless there are sales, then that is a sign the economy is pretty weak and households are struggling.".

By holding back, the RBA risks compounding the pain for Australian households already struggling under the weight of high rates and rising living costs.

In stark contrast, New Zealand's bold approach shows how decisive action can provide relief for households and mortgage holders, and stability for the retail sector in tough times.

So, the question remains: how long can the RBA afford to wait before relief becomes too little, too late?

What are the best and worst-performing sectors this week?

The best-performing sectors include Health Care, up more than 3%, followed by Real Estate and Information Technology, both up more than 2%.

The worst-performing sectors include Energy, down more than 3%, followed by Financials and Materials, both down under 0.5%.

The best-performing stocks in the ASX top 100 include Pro Medicus, up more than 11%, followed by Lendlease, up more than 6% and Telix Pharmaceuticals, up more than 5%.

The worst-performing stocks include Pilbara Minerals, down more than 8%, followed by Paladin Energy, down more than 5% and Whitehaven Coal, down more than 4%.

What's next for the Australian stock market?

This week, the All Ordinaries Index maintained its upward momentum, with buyers driving the index up more than 0.5% to test the critical 8,700 level.

From a technical perspective, the market is currently following a classic uptrend pattern, where robust buying is met with healthy selling.

This trajectory suggests the index could climb to the 8,800-8,900 range by year-end. While heavy selling pressure seems unlikely before December concludes, it's always wise to stay prepared for any shifts.

If sellers do emerge, it's essential to remain calm, as strong selling confirmation typically unfolds gradually. The key is to let profits run and avoid cutting them short prematurely.

Until sellers establish a clear presence, riding healthy pullbacks can enhance returns. Should selling occur next week, look for support around the 8,500 level.

On the sector front, it's impressive that the index posted a positive return despite its three strongest sectors-Materials, Energy, and Financials-closing in the red.

A standout performer was the real estate sector, buoyed by rising expectations of lower interest rates next year. Known for its stability and yield, real estate has attracted significant investor interest.

Meanwhile, consumer discretionary stocks enjoyed a holiday boost, with early festive spending benefiting retailers.

For traders, the ongoing sector rotation presents valuable opportunities. Timing your investments strategically is key to maximising growth.

For instance, the tech sector currently shows strong potential for short-term gains, while a medium to long-term approach in sectors like Energy and Materials may help you unlock their full upside potential.

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