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Key Points Rich valuations, AI bubble worries and uncertainty about central bank rate cuts are the main negatives for shares at present and could see recent falls extend further. Against this though, global profit growth remains strong and there is no sign of recession suggesting...
Key Points Cyclical fluctuations are a key aspect of investment markets. Most are driven by economic developments but get magnified by swings in investor sentiment. Of particular importance are the long-term cycles which are often driven by waves of innovation and the 3-5 year business...
Key Points Rich share market valuations are warning of the risk of a pullback in shares amidst fears of a bubble and it’s possible that enthusiasm for AI has run ahead of itself. But the fundamentals behind this are arguably far stronger than they were...
Key Points Five mega trends still point to risks of a more inflation prone/lower growth environment than pre-pandemic. These are: a move away from economic rationalist policies; the reversal of globalisation; rising geopolitical tensions; climate change and decarbonisation; as well as slowing and aging populations....
Key Points The gold price has surged to record highs. Key drivers have been central banks increasing their gold reserves, rate cuts, a renewed downtrend in the $US and demand for a hedge against public debt worries and geopolitical threats. While gold is short-term overbought,...
Key Points Australia is seeing a gradual economic recovery with growth likely to reach 2.5% next year. This in turn is underpinning a likely upswing in profits. The RBA is expected to cut again in November, February and May to 2.85%, although the risk is...
Key Points Compound interest is an investor’s best friend but can be a borrower’s worst nightmare. The higher the return, the earlier and bigger the investment contribution and the longer the period the more it works. To make the most of it, ensure an adequate...
Key Points The RBA cut its cash rate by 0.25% taking it to 3.6%. This is the third rate cut in this easing cycle. The RBA sees inflation running around target but has revised its growth forecasts down again. Its forecasts assume that the cash...
Key Points The last decade has seen productivity stagnate in Australia. This has curtailed growth in living standards and real wages. Policies to boost productivity include: deregulation; more housing supply; a cap on public spending; and tax reform. Unfortunately, the political pendulum has moved against...
Key Points The Australian housing market remains far more complicated than many portray it to be. The Australian housing is cycle is turning up again; falling interest rates are the key driver; along with a chronic undersupply of homes of 200,000-300,000 dwellings; this partly reflects...
