(19 August 2017, AFR, p33, by Jessica Sier) ‘Investors attention was dragged offshore on Friday as growing unease in global financial markets lifted following further political turmoil in Washington and after terrorists struck a crowded Barcelona street. After a week driven strongly by local company earnings, with the likes of Telstra dragging the bourse down and … Continue reading
(19 August 2017, AFR, p20, by Angus Grigg) ‘It was June 2009 when the International Monetary Fund noted the “extraordinary expansion” in bank lending across China. The fund called for Beijing to be “vigilant” in looking out for a rise in bad debts, while generally assuming the run-up in lending would slow or even stop … Continue reading
(18 August 2017, AFR, p13, by John Kehoe) ‘Australian Andrew Liveris, President Donald Trump’s top business adviser on manufacturing, over the years has told associates, “In Washington you’re either at the table, or on the menu”. But dozens of high-profile CEOs are abandoning the board table of Mr Trump, who Dow Chemical’s Mr Liveris once … Continue reading
(18 August 2017, AFR, p36, David Gelles) ‘Corporate America’s influential leaders have turned their backs on the President.’ ‘On Monday, Indra Nooyi, the chief executive of Pepsi, picked up the phone and began calling other prominent corporate chieftains who – like her – had agreed to advise President Donald Trump. A rebellion was brewing. Along with … Continue reading
(18 August 2017, AFR, p31, by Karen Maley) ‘The powerful and usually scrupulously apolitical US Federal Reserve has come out with unusually forthright criticism of the Trump administration’s failure to chart a clear economic course, at a time when US corporate bosses are scrambling to distance themselves from the US leader. As US President Donald … Continue reading
(18 August 2017, AFR, p30, by Philip Baker) ‘If it’s true that the first step towards fixing a problem is admitting that you have one, then the US Federal Reserve is on its way to finding out why inflation is so low right now. As every economist knows, the Fed’s main job is to target inflation … Continue reading
(18 August 2017, AFR, p29, by Edward Luce) ‘Who poses the most realistic threat to the US republic: Kim Jong Un or Donald Trump? In theory, it is obviously Mr Kim. Yet US democracy is within Mr Trump’s striking range at all times. By providing cover to homegrown neo-Nazis, America’s commander-in-chief is giving succour to … Continue reading
(18 August 2017, AFR, p29, by Gabriel Wildau) ‘One of the most influential analysts of China’s financial system believes that bad debt is $US6.8trn above official figures and warns that the government’s ability to enforce stability has allowed underlying problems to go unchecked. Charlene Chu built her reputation as China banking analyst at credit rating … Continue reading
(18 August 2017, AFR, p14, by Leika Kihara) ‘Japan’s exports rose for an eighth straight month in July on robust shipments to the United States and a boost from a weak yen, suggesting the economy is carrying strong momentum through to the second half of the year. The data underscores the Bank of Japan’s view … Continue reading
(18 August 2017, The Age, p10, Eryk Bagshaw) ‘The average number of workers being employed every six months has had its strongest run in seven years, new figures show, as the unemployment rate drops to 5.6 per cent on the back of 10 straight months of gains in full-time employment. The economy has added more … Continue reading
(17 August 2017, AFR, p26, by Jessica Sier) ‘Despite encouraging signs the global economy is picking up, two surveys of fund managers indicate that caution is the prevailing sentiment in the industry, with a record number of professional investors saying equities are overvalued. Of the 174 fund managers surveyed by Bank of America Merrill Lynch, … Continue reading
(17 August 2017, AFR, p26, by Karen Maley) ‘Janet Yellen, the head of the powerful US central bank, will have felt a flicker of pleasure as she perused the latest US retail sales figures. US consumers – whose spending accounts for more than two-thirds of economic activity – are loosening their purse strings as a gratifying display … Continue reading
(17 August 2017, AFR, p25,by Philip Baker) ‘Investors these days can be a hard lot to please and it’s not hard to work out why. But is it right? CSL and Seek are two companies that on Wednesday paid severely for not quite meeting analyst forecasts. Despite good profit results from both companies, investors took an … Continue reading
(17 August 2017, AFR, p11, by Angus Grigg) ‘China’s consumers spend too little and its corporate sector spends too much. That’s the blunt message from the latest country report from the International Monetary Fund, which highlights a series of worrying, if not new, imbalances across the Chinese economy. In six charts the IMF lays out … Continue reading
(17 August 2017, The Age, p11, Eryk Bagshaw) ‘The wages of working Australians are going nowhere, new figures show, stalling at a record low while the earnings of more than 10 million private sector employees fall below the cost of living. The figures, published by the Australian Bureau of Statistics on Wednesday, show wages grew … Continue reading
(17 August 2017, The Age, BusinessDay, p23, Carolyn Cummins) ‘Dexus Property has made the call that the Sydney and Melbourne office markets are entering a golden period of high demand, low vacancy and few new developments, for at least another three years. This will lead to net rental growth, where incentives in contracts will be … Continue reading
(16 August 2017, AFR, p47, by John Kehoe) ‘Big business around the world may have become too powerful, to the detriment of the economy. This emerging school of economic thought is gaining traction among reputable economists and investors in the United States. The potential problem deserves serious analysis, devoid of the typical simplistic ideological fights … Continue reading
(16 August 2017, The Age, BusinessDay, p21, Eryk Bagshaw) ‘The Reserve Bank has warned construction activity could begin to decline as the number of residential building approvals falls from its peak in 2016. The message, released in the minutes of the central bank’s August meeting on Tuesday, comes a week after BIS Oxford Economics forecast a 31 … Continue reading
(15 August 2017, AFR, p29, by Chris Flood, FT.com) ‘Record-breaking inflows into exchange traded funds this year are fuelling fears that the tide of money surging into passive investment is helping to inflate a bubble in the US stock market. Demand for ETFs has accelerated sharply this year, as a growing number of investors move … Continue reading
(14 August 207, AFR, p19, by Gillian Tett) ‘A decade ago, I spent a sleepless night worrying about a Spanish trash bin. The reason? On Thursday August 9 2007, financial markets suddenly seized up. Since I was running the Financial Times markets team, I spent two days frantically trying to identify the reason for the … Continue reading
(14 August 2017, AFR, p5,by Nick Lenaghan) ‘First home buyers helped to hold auction clearance rates firm in Sydney and Melbourne over the week even as the number of listings swelled. The national clearance rate was at 70.5 per cent, up on last week’s 68.2 per cent, despite the number of homes taken to auction … Continue reading
(14 August 2017, AFR, p1, by: Angus Grigg, Lisa Murray) ‘Chinese property buyers are turning away from Australian housing as efforts by regulators in both countries to slow investment begin to bite. Chinese buyers, who make up about 80 per cent of all foreign property purchases in Australia, have grown wary after being hit by Beijing’s tightened capital controls, local banks restricting … Continue reading
(12 August 2017, AFR, p31, by Patrick Commins) ‘Five months ago I asked whether valuations “matter any more”. Prices across assets have been sky-high for a long time, but keep heading higher. The answer was in that in one important way they do, and in another important way they don’t. Starting with the latter, they … Continue reading
(12 August 2017, AFR, p28, by Karen Maley) ‘The market’s tenuous confidence has been shattered. Wall Street witnessed its biggest sell-off in nearly three months as investors dumped shares amid escalating tensions between Washington and Pyongyang, and instead sought refuge in traditional safe havens such as US bonds and gold. Investors took fright after US President Donald Trump refused … Continue reading
(12 August 2017, AFR, p25, by Vesna Poljak) ‘Jubilant business conditions are at odds with reasonable but uninspiring earnings forecasts, strategists say, as another week of results fails to align upbeat business sentiment and market reality.’ ‘On Friday, Baby Bunting suffered a 18 per cent share price fall, to $1.60, upon weaker than expected trading. Soft … Continue reading
[COMMENT: Now this is fantastic reading. A good recap on how the GFC unfolded, which provides some clues as to how the next one might unfold. And it contradicts many supposed experts who have claimed that no one could see the GFC coming. Well, this article describes the clues that were readily visible on 9th … Continue reading
(11 August 2017, AFR, p31, by David Millhouse) ‘These are heady times in the markets for Chinese commodity futures and listed industrial shares. Large industry leaders such as Aluminum Corp of China Ltd, or Chalco as it’s known, have risen more than 50 percent recent months. Angang Steel is up some 30 percent in the … Continue reading
(11 August 2017, AFR, p29, by Lucy Hornby, Financial Times) ‘For China’s ruling Communist party, its foreign exchange reserves are a symbol of national strength and are a crucial buffer against economic shocks. So the alarming announcement that forex reserves had fallen below $US3tn in January marked a shift in political faultlines that is only being … Continue reading
(11 August 2017, AFR, p14, by: Angus Grigg, Lisa Murray, Matthew Cranston, Su-Lin Tan ) ‘China’s Wanda Group, under pressure from Beijing to crimp its offshore expansion and reduce debt, has sold a majority stake in its two flagship Australian real estate projects. The Hong Kong-listed Wanda Hotel Development said on Thursday it would sell … Continue reading
(11 August 2017, The Age, p6, Kirsty Needham) ‘Beijing: North Korea’s military commander has detailed plans to fire a missile at Guam by mid August after US President Donald Trump’s “fire and fury” comment showed “sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him”. … Continue reading
(10 August 2017, AFR, p44, by Michael Bleby) ‘Western Australia leads the country in terms of problem home loans for Commonwealth Bank of Australia, with a 1.23 per cent arrears rate that is twice the national average. While home loans in the west only account for 16 per cent of the total for the country’s … Continue reading
(10 August 2017, AFR, p38, by Larry Schlesinger) ‘A stand-off between “greedy” vendors and finance-constrained buyers delivered a modest 50 per cent clearance rate at a commercial property portfolio auction in Melbourne on Wednesday, raising fears of a correction in values.’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)
(10 August 2017, AFR, p32, by Nick Lenaghan) ‘The average vacancy rate across shopping malls around the country has risen to its highest level in eight years amid softening conditions, store closures and the long shadow of online shopping. Nationally, the shopping centre average vacancy rate – excluding CBD retail – rose from 2.6 per cent … Continue reading
(10 August 2017, AFR, p8, by Michael Bleby) ‘First home buyers prepared for stamp duty exemptions in June by pushing their new home loan commitments to a two-year high, official figures showed on Wednesday. Ahead of the elimination of stamp duty charges on lower-priced properties in NSW and Victoria from July 1, the first home … Continue reading
(10 August 2017, AFR, p7, by Jacob Greber) ‘Bond markets have played a key role in forcing Australia’s biggest mining companies to haul back on investment spending since 2012, pushing states like Queensland and Western Australian into significant economic downturns, suggests the Reserve Bank of Australia. In a speech surveying Australia’s bond market developments over … Continue reading
(10 August 2017, AFR, p7, by Jacob Greber) ‘Slumping confidence among heavily indebted, increasingly taxed and low-wage-growth inflicted households is contrasting dramatically with a buoyant business sector enjoying the best operating conditions in a decade. In a survey that suggests the chances of a Reserve Bank of Australia official rate hike before 2019 is less … Continue reading
(10 August 2017, The Age, BusinessDay, p22, Reuters) ‘A measure of Australian consumer sentiment slipped to its lowest in more than a year in August as worries over family finances swamped increasing optimism about the economic outlook. The survey of 1,200 people by the Melbourne Institute and Westpac Bank published on Wednesday found consumer sentiment … Continue reading
(9 August 2017, AFR, p44, by Alan Rappeport) ‘Donald Trump promised Americans that they would be exhausted from “winning” on trade under his presidency. But nearly seven months after Trump took office, the industries he vowed to protect have become tired of something else: waiting. After beginning his presidency with a bang by withdrawing from … Continue reading
(9 August 2017, AFR, p29, by Karen Maley) ‘Australian bankers will have mixed feelings about the latest signs that some big, high-flying Chinese corporates could soon be seeking to offload some of their Australian assets. Their first, almost knee-jerk response, will be to try and muscle into some of these deals, which means they’ll be frantically calling … Continue reading
(9 August 2017, AFR, p11, by Lisa Murray) ‘The Chinese government appears to be winning the battle against capital flight, armed with a set of regulatory controls and helped along by a weaker US dollar. After capital flowed out of the country in record amounts last year, eroding China’s reserves, the government started to pull … Continue reading
(9 August 2017, The Age, BusinessDay, p24, Eryk Bagshaw) ‘Business conditions have reached their highest level in a decade while consumer confidence stagnates, highlighting the widening gulf between the profit prospects of business and workers struggling with low wage growth. The National Australia Bank monthly business survey of more than 400 firms, released on Tuesday, … Continue reading
(9 August 2017, The Age, BusinessDay, p30, Elias Glenn, Stella Qiu, Reuters) ‘BEIJING (Reuters) – China’s exports and imports grew much less than expected in July, raising concerns over whether global demand is starting to cool even as major Western central banks consider scaling back years of massive stimulus support. ‘ Read more at Reuters.com
(8 August 2017, AFR, p39, by Michael Bleby) ‘Construction activity expanded in July as commercial work grew at its fastest pace in 12 years and detached house building also sped up, the latest Performance of Construction Index showed on Monday. The monthly Ai Group/ Housing Industry Association survey of industry conditions rose 4.5 points to … Continue reading
[COMMENT: Here is some good history, and some lessons, about (speculative) market bubbles, going back to 1636-1637 and the time of the infamous Tulip Bubble.] (8 August 2017, AFR, p29, by John Authers) Wall Street ‘After the credit crisis began to unfold in the summer of 2007, many on Wall Street and in the City … Continue reading
(8 August 2017, AFR, p29, by Kara Scannell) ‘Financial institutions have paid more than $US150 billion ($189 billion) in fines in the US relating to the credit crisis, passing a significant milestone a decade after it became clear that the country’s subprime woes had become a global problem. Ten years ago this week, France’s BNP Paribas … Continue reading
(7 August 2017, AFR, p21, by Karen Maley) ‘All eyes were on the Dow Jones Industrial Average last week as it breached 22,000 for the first time after notching up records for eight consecutive days. But some analysts warn that headlines trumpeting the Dow’s dazzling rise have blinded investors to some disturbing trends beneath the … Continue reading
(7 August 2017, AFR, p20, by Timothy Moore and Patrick Commins) ‘More records on Wall St set an upbeat background for investors this week, but the accelerating flow of news from reporting season will ultimately set the tone on the ASX. The Dow powered higher for an eighth consecutive day on Friday as positive economic news … Continue reading
(7 August 2017, AFR, p11, by Szu Ping Chan) ‘One of the world’s top economists has warned that China’s addiction to debt and reliance on investment-led growth will trigger a severe financial shock when its unsustainable economic model implodes. Harvard economics professor Ken Rogoff said a hard landing was inevitable for the world’s second largest … Continue reading
(7 August 2017, AFR, p3, by: Matthew Cranston, Michael Bleby) ‘Clearance rates for house and apartment auctions in Sydney and Melbourne climbed back into the 70 per cent range over the weekend with a growing portion of the sale success attributed to first home buyers.’ Read more at AFR.com (might need AFR login access, or … Continue reading
(4 August 2017, AFR, p31, by John Kehoe) ‘The Dow Jones Industrial Average topped 22,000 points for the first time in history in the United States and President Donald Trump quickly took credit for the milestone. But most investors and analysts argue Mr Trump is no longer the driving force behind the bull market rally … Continue reading
(3 August 2017, AFR, p30, by Michael Bleby) ‘More than 1.3 million households cannot afford the private rental market or need assistance to rent without putting themselves in financial stress, a report by housing think tank Ahuri says. The provisional figures estimate that as many as 527,000 households are unable to…’ Read more at AFR.com … Continue reading
