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Key Points: Shares have made it to record highs this year but after strong gains are a bit vulnerable to a near term pull back. However, we remain upbeat on a 12-month view as falling inflation allows rate cuts and hopefully recession is avoided. Seven...
Key Points: Rate hikes have worked in helping slow inflation and rate cuts are likely this year. Expect a bumpy ride though. The risk of recession remains high at around 40% in the US and Australia. Geopolitical risk including around the US election remains high...
Key Points: The Australian Government’s changes to the Stage 3 tax cuts have refocused attention on the need for tax reform. The Australian tax system has five key problems: it’s heavily reliant on income tax; it’s complicated by numerous tax concessions; it’s highly progressive; it...
Key Points: Inflation is in retreat thanks to improved supply and cooling demand. A further fall is likely this year. Australian inflation remains relatively high – but this mainly reflects lags rather than a more inflation prone economy. Profit gouging or wages were not the...
Key Points: The five key themes for 2023 were: better than feared growth; disinflation; peak interest rates (probably in Australia too); lots of geopolitical threats but not as bad as feared; and AI hit the big time. This boosted shares and helped bonds with solid...
Key Points: Australian home prices rose again in October, with the supply shortfall on the back of record immigration dominating. Prices are now on track for a 9% gain this year. While the supply shortfall is likely to continue there is a high risk that...
Key Points: Five megatrends suggest higher medium term inflation pressures & lower economic growth 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. A productivity...
Key Points: The war in Israel has added to the upside risks to oil prices and downside risks to shares in the near term. If Iran stays out of the conflict & a major supply disruption is avoided the impact on shares should ultimately be...
Key Points: The rise in bond yields has left shares offering a low risk premium over bonds leaving them at risk of more softness. The conflict in Israel has added to the risk, although the threat should be minimal if Iran is not drawn in...
Key Points: Starting point valuations – like yields and price to earnings ratios – are key drivers of medium-term investment returns. For growth assets it’s often more complicated, with the level of interest rates playing a big role. At present, valuation starting points for term...
