The FinSec View

Issue: 9th July 2021 The 2021 Intergenerational Report is in. The 2021 Intergenerational Report (IGR) was released on the 28th June revealing the treasurers educated guess at what Australia will look like in 2060. It is a five-yearly reminder that, without action, an ageing population, and other issues will leave public finances looking ugly. To use Treasurer Frydenberg's own word, the latest IGR was "sobering" on two main fronts. The population is growing slower and ageing faster than expected. [...]

Issue: 11th June 2021 Market Update May was a month where every asset class worldwide seemed to be up around 1'ish'% (shares, bonds, commodities etc.). Not the radical gains experienced after the US election and early this year, but an expected pause as markets begin their re-balancing. Historically, when markets travel as fast as they have over the last 12 months, they tend to collapse a little under their own weight. Very similar to the GFC when we had [...]

Issue: Friday 28th May 2021 It has been a choppy month for equity markets in May. The broad Australian and US indices are on track to finish higher by about 1% and 0.6% respectively after recovering from mid-month lows induced by a sell-off in high valuation tech companies. The tech-heavy Nasdaq has not completely recovered and looks as though it will end the month slightly down. In the past week, there has been a resurgence in GameStop and AMC [...]

Issue: Friday 14th May 2021 The days directly after Budget are arguably more important than Budget day itself. With the Budget announcement out of the way, there is more space to digest and to consider the commitments (particularly their context) - As always, the opinions are partisan, polarising and prolific!! One Australian who seems very happy is Treasurer Josh Frydenberg. Two years ago, the Budget was Back in Black, now it's Simply Red, and the politics are working well [...]

April has been another excellent month for equity markets. The US hit new highs again last night with the S&P500 up 0.7% and similar advances for the Dow Jones. The Nasdaq underwhelmed slightly but still rose 0.2%. The three drivers: Positive economic data - GDP rose by 6.4%, and the number of people filing for unemployment benefits hit the lowest level since before the pandemic; Good profit results from some of the larger companies in the US - Over [...]

Issue: Friday 16th April 2021At the risk of sounding like a broken record... 'we are in an economic environment never seen before'. Global equities trade near record highs, in Australia the property market is explosive, consumer and business confidence is at a 10 year high, and our economy is growing faster than ever. And it's not just Australia. Globally, experts are now forecasting 10% economic growth in just two years.Free money is compelling indeed!In Australia, activity is back to pre-COVID [...]

End of March Market Update Both Australian and US markets finished the month up by 1.8% and 4.4% respectively. March also tied off an eventful yet positive quarter for both markets which saw the All Ordinaries rise 3.6% and the S&P 500 rise 6.2%. March saw bond yields continue their steady rise which caused a mild sell-off in some of the most popular tech names during the quarter and a rotation into value stocks. The financials, energy and consumer [...]

Due to a glitch in our system, Friday's customary view comes to you a weekend late. For those in South Australia, we trust you enjoyed a relaxing and restful long weekend. In the spirit of International Women's Day (yesterday), we take a moment to acknowledge and celebrate the work, spirit and resilience of all the women in the FinSec community. It's rare that there is so much focus on bond yields and inflation, and it's mainly due to their potential impact on [...]