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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...
Key Points: The key drivers of expensive housing in Australia have been low interest rates and a chronic housing supply shortfall. Thankfully Australian governments are now focusing on boosting supply, but this will face various constraints and more effort needs to be put into decentralisation. ...
Key Points: It’s likely that the RBA’s cash rate has peaked with numerous indicators pointing to slower economic growth and inflationary pressures easing. While the risk in the short term is still on the upside for rates or a delay to the start of rate...
Key Points: The natural human tendency to focus on bad news, the increased availability of information and the rise of social media are magnifying perceptions around worries and making it easier to be pessimistic. However, to succeed as an investor it makes sense to err...
Key Points: China’s economy is slowing not helped by a property collapse and longer-term structural constraints around poor demographics and threats to productivity growth. China needs to save less and spend more, and this requires significant fiscal stimulus. So far policy stimulus has been tepid,...
Key Points: The last 20 years have seen a slump in productivity growth in Australia from over 2% pa to less than 1% pa. This has curtailed growth in living standards and real wages. It will adversely affect asset class returns if allowed to persist. ...
Key Points: Rapid monetary tightening points to a high risk of recession and, given lags in the way it impacts the economy, just because it hasn’t happened yet does not mean it won’t. However, a combination of falling inflation, a lack of excesses beyond inflation,...
Key Points: For nearly 30 years Australia had benign economic cycles so the current environment may be a bit of a shock for many. Still low unemployment and still high inflation despite slowing economic growth are not that unusual because they both normally lag big...
