Scene from the 1976 film, Network. "I don't have to tell you things are bad. Everybody knows things are bad. It's a depression. Everybody's out of work or scared of losing their job. The dollar buys a nickel's worth. Banks are going bust. Shopkeepers keep a gun under their counter. Punks are running wild in the street. There's nobody anywhere that seems to know what to do, and there's no end to it ... but there's at least one thing you [...]
How Markets will React: A Short, Medium and Long Term View. Keeping an eye on the short term While there was a quick selloff at first signs of a conclusion to the U.S. elections, and markets seem to have recovered quickly, there still may be some near-term volatility. As with many geopolitical events that generate market swings, the first priority is to rationally evaluate your chosen investment strategy. Review your primary market indicators (we use cycle, value and sentiment), consult your [...]
Scott Morrison's maiden budget speech was the first since Peter Costello's debut 20 years ago that did not include the word 'surplus' an unreported, but perhaps telling, fact. It is no secret that the 2016 Federal Budget made negligible progress on improving Australia's bottom line. Projecting a small surplus way out in 2020/21 it has experts concerned about the future of Australia's AAA credit rating. But, to its credit, this pre-election budget didn't make things worse. Debt accumulation seems to be [...]
Excerpt: 2016/17 FEDERAL BUDGET REPORT May 2016 For us, the big story out of Budget 2016 is of course Morrison’s crackdown on high-end super tax concessions. Ten years on from Costello’s tax-free super savings and now, on the other side of the resources boom, Morrison has redefined the purpose of super as a substitute or supplement to the welfare safety net of the aged pension, not a vehicle for wealth accumulation or bequests. Whilst we welcome the fairness measures and in [...]
Given the relentless media coverage of the issue, it will come as no surprise that markets have been in a state of volatility since the start of the year. This volatility comes off the back of the second half of 2015, seeing a 10% reduction in the value of the Australian market. So all in all, not a market that is causing investors to sleep without a tad of anxiety. Having mentioned the media, let's not forget that good news doesn't [...]
Another terrible day on the ASX is unfolding as tanking Chinese sharemarkets wipe out the past two years of gains (at 3.15pm (AEST) the S&P/ASX200 index was down 4 per cent cent to 5007, the biggest intraday drop since 2007). Is it a correction or something more serious? Whilst news headlines appear dominated by China, there are several themes that are driving the share market and will set the agenda for markets in coming weeks First the timing of the US [...]
Greece … there has been a lot of noise, a lot of commentary and you have probably (for the most part) heard enough when it comes to Greece - we will keep it brief. Greek PM Tsipras has announced his resignation and the country is now headed for another election (September). While Greece and the Eurozone have agreed on a third bailout program the IMF is likely to insist that Greece’s debt burden is reduced before participating in the bailout with [...]
by Michael Collins, Investment Commentator at Fidelity July 2015 Herbert Stein (1916 to 1999) was a US economist who was influential in his time. Among his achievements, Stein was chairman of the president-guiding Council of Economic Advisers under Richard Nixon and Gerald Ford, was attached to the American Enterprise Institute think tank, contributed to The Wall Street Journal and taught at the University of Virginia. Stein wrote books that are still available and was the first columnist of Slate’s “Dear Prudence” [...]
Earlier this month, without notice or explanation, the People’s Bank of China (PBOC) lowered the yuan’s ‘daily fix’[1] by 1.9% against the U.S. dollar, the largest devaluation in 20 years. Investors responded by hitting the panic button. Investor’s feared that it signalled a sharper than expected slowdown in the world’s biggest economy. Apple shares dropped 5%, the Australian dollar nose dived and oil dipped to a six-year low. Financial analysts were blind sighted, was the PBOC’s intention to weaken the yuan [...]
The past few weeks have seen banks tighten up lending conditions for property investors – either charging higher interest rates or imposing lower loan to valuation ratios or both. There is even talk of lenders managing their exposure by focussing on postcodes. This is all in response to increasing pressure from the banking regulator APRA (the Australian Prudential Regulation Authority) demanding that the 10% cap on property investor lending growth that it announced last December be adhered to. Those who have [...]