19 May Investment outlook Q&A – oil, bond yields, the Budget and the RBA
Key Points:
- The oil supply shock remains a significant threat to economic growth and shares – particularly with the Strait of Hormuz remaining closed and oil reserves running down.
- It’s contributing to rising bond yields and putting pressure on share market valuations.
- The tax changes in the Budget will make shares and super relatively more attractive investments and favour high yielding over growth investments (ie, less risk taking).
- The Budget contains good moves to deregulate, but little real tax reform with public spending remaining too high.