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Key Points: Significant government support is essential to enable parts of the economy to successfully hibernate. This will be financed by borrowing and is affordable given Australia’s relatively low public debt and low borrowing rates. Central bank support to keep financial markets functioning properly is...
Key Points: Global share markets have fallen into a bear market, but whether this turns out to be long or short depends on how long the hit to the economy from coronavirus lasts. There are big differences between the current disruption to economic activity –...
Key Points: The Australian housing market is at risk from the coronavirus recession Australia has now entered. A relatively short recession that sees unemployment rise to around 7.5% would likely only set prices back around 5% or so after which prices would bounce back. But...
Key Points: Successful investing can be really difficult in times like the present with immense uncertainty around the impact of coronavirus on the outlook. This makes it all the more important to stay focussed on the basic principles of successful investing. These five charts focus...
Key Points: The rout in financial markets has continued, on the back of coronavirus, made worse by a flow on to oil markets. The risk of a deeper hit to economic activity has risen. Key things to watch are the daily number of new cases,...
Key Points: Share markets have fallen sharply over the last week or so on the back of coronavirus concerns. Shares may still have more downside and the uncertainty around the coronavirus crisis is very high, but we are of the view that it’s just another...
Key Points: While reported new coronavirus cases in China have slowed, the pickup in cases outside China has led to a renewed sharp fall in share markets and bond yields. Our base case is that the outbreak will be contained allowing share markets and bond...
Key Points: Shares are vulnerable to a short-term correction. But with inflation low, and as long as recession is not imminent, it makes sense that traditional valuations like PEs are higher than their long-term average. Similarly, it makes sense that property yields are lower than...
Key Points: The coronavirus outbreak is just another of a long list of worries. Our natural inclination to zoom in on negative news combined with a massive ramp up in the availability of information is arguably making us worse investors: more fearful, more jittery, more...
Key Points: The China coronavirus outbreak has led to concerns of a global pandemic triggering an economic downturn. Our base case is that the outbreak will be contained allowing share markets and bond yields to rebound. However, uncertainty is high given that the coronavirus is...
