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30 July 2016 (AFR) – Reporting season doesn’t look so bad outside banks and miners

(30 July 2016, AFR, p27, by Philip Baker) ‘If it wasn’t for the banks and resources sector, the reporting season might not look so bad. But thanks mainly to falling commodity prices, the top listed companies are expected to report a drop in earnings per share growth for the second consecutive year for the first time since … Continue reading

30 July 2016 (AFR) – Bull markets: Why investors overestimate the chances of a crash

[COMMENT: This interesting article includes discussion about cognitive biases and the psychology of investing, and the natural tendency of people (and investors) to be over confident (the over-confidence bias), and to tend to ignore bad news which they don’t want to hear (confirmation bias), as well as how people react to the possibility of suffering … Continue reading

30 July 2016 (AFR) – How Australia’s top-performing super funds rank

[COMMENT: Here is the AFR’s table of superannuation funds’ performance, listing lots of super funds with their performance over 1, 5 and 10 years. BUT, let’s take a look at their performance in another year’s time? How many of the top performers in this table will be near the top of the table next year, … Continue reading

30 July 2016 (AFR) – Alphabet revenue surges 21pc, exceeds analysts’ expectations

(30 July 2016, AFR, p9, Reuters) ‘Alphabet, Google’s parent, posted a 21.3 per cent increase in second-quarter revenue, exceeding analysts’ expectations, driven by strong advertising sales on mobile devices and for video content. The strong revenue growth suggests that Google is successfully navigating the transition to mobile, said Colin Gillis, an analyst with BGC Partners.’ … Continue reading

30 July 2016 (AFR) – Surviving the off-the-plan finance crunch

(30 July 2016, AFR, p6, by Duncan Hughes) ‘Off-the-plan investors struggling to complete their apartment purchase because of strict new lending rules are being urged to face tough options to get their financial problems under control. Financial advisers and financiers say thousands of investors with exposure to billions of dollars in high-rise apartments are searching for … Continue reading

30 July 2016 (AFR) – No end to home price growth

(30 July 2016, AFR, p1, by:  Michael Bleby, Su-Lin Tan) ‘Sydney and Melbourne house prices are on track for a fourth year of double digit growth as the strength of demand, and the shortage of supply, continues to confound property experts who predicted the boom would slow in 2016.’ Read more (and see the graph … Continue reading

29 July 2016 (AFR) – Victorian property surges in latest municipal revaluations

(29 July 2016, AFR, p32, by Nick Lenaghan) ‘The market value of Victorian property – both residential and commercial real estate – has surged a record 20 per cent to $1.87 trillion in the past two years.It is the largest biennial jump since the valuation system was reformed in 2000 and driven most strongly by … Continue reading

29 July 2016 (AFR) – UK stocks are not cheap enough given the Brexit unknowns – British stocks in limbo

(29 July 2016, AFR, p27, by John Authers) ‘A week is a long time in British politics. So said Harold Wilson, a former prime minister, and the month since the vote to leave the EU feels like a lifetime. But extraordinary political volatility has been accompanied by calm on the markets. How to explain this, and … Continue reading

29 July 2016 (AFR) – Confidence down, Mayor frets as banks put bite on Whyalla house buyers

(29 July 2016, AFR, p3, by Simon Evans) ‘The acting mayor of Whyalla says confidence has been shredded in the stricken steel town, with some banks demanding hefty deposits for house purchases, while proposed wage cuts would hit discretionary spending as small businesses teeter on the verge of collapse. Marathon negotiations between Arrium’s administrators KordaMentha and unions were held on … Continue reading

29 July 2016 (TheAge) – Lazard drawn to emerging market debt-yields with record inflows

(29 July 2016, The Age, BusinessDay, p22, Jessica Sier, Contact via Email ) ‘One of the world’s largest fund managers plans to pour more money into emerging market debt, citing improving fundamentals in economies such as Argentina and Brazil. Lazard Asset Management, which manages $US171.89 billion, favours US dollar denominated government bonds, however…’ Read more at TheAge.com.au

28 July 2016 (AFR) – Rates heading in one direction – and that’s down; Inflation ‘much weaker’ than RBA’s target band

(28 July 2016, AFR, p28, by Jonathan Shapiro) ‘The June inflation data, which fell broadly in line with economist forecasts, is not enough to convince the market that the Reserve Bank will cut the cash rate to 1.5 per cent when it meets on Tuesday. But the reality is that the reading does confirm that inflation remains low, and lower … Continue reading

28 July 2016 (TheAge) – Reserve Bank on standby to cut cash rate as inflation plunges

(28 July 2016, The Age, p3, Peter Martin) ‘Reserve Bank governor Glenn Stevens is considering cutting interest rates as soon as Tuesday following news that Australia’s official inflation rate has fallen to just 1 per cent. The new long-term low is well below the Bank’s target of 2 to 3 per cent and the lowest … Continue reading

27 July 2016 (AFR) – Upcoming earnings season presents more risk than reward

(27 July 2016, AFR, p26, by James Frost) ‘Experts are warning investors to temper their expectations ahead of the earnings season as trying conditions for business persist and optimistic forecasts look increasingly shaky. After 18 months in the wilderness, mining stocks in particular will be closely watched with analysts buoyed by a broad recovery in … Continue reading

26 July 2016 (AFR) – Record cattle prices are ‘unsustainable’, says Merricks Capital

(26 July 2016, AFR, p11, by Jonathan Shapiro) ‘Australia is a natural resources nation so the daily price fluctuations of our most important commodities are the pulse of our economic fortune.  But last week, very few noticed the price of a key Australian export reached a 20-year high. The Eastern Young Cattle Indicator topped $6.61 a kilogram, … Continue reading

25 July 2016 (AFR) – Sign of things to come: Low auction numbers suggest tight spring housing market

(25 July 2016, AFR, p3, by Michael Bleby) ‘Clearance rates remained strong in another week of low auction numbers that analysts now think is likely to continue into the usually strong spring selling season. The capital city average of 70.7 per cent, based on 1076 reported results from a 1295 scheduled auctions, was little changed from the previous week, … Continue reading

25 July 2016 (TheAge) – Victoria and NSW economies ‘head and shoulders’ above the nation: CommSec

(25 July 2016, The Age, p2, Richard Willingham) ‘Victoria’s economy is growing faster than that of any other state in Australia, according to fresh analysis from CommSec, but still trails NSW’s as the best-performing economy. The quarterly “State of the States” report, released on Monday, shows Victoria has the second-best-performing economy behind NSW, but the … Continue reading

23 July 2016 (AFR) – Never mind the facts, buy on the promise – Investors ride risky wave on the back of cheap money

(23 July 2016, AFR, p27, by Philip Baker) ‘Fuelled by the promise again of more cheap money, it’s been the classic “buy first, ask questions later” rally that’s caught many investors on the hop.  You could be excused for thinking investors should know better by now, but the momentum-based buying over the past few weeks shows perhaps … Continue reading

23 July 2016 (AFR) – A-REITS boost payouts on rising property tide

(23 July 2016, AFR, p21, by Larry Schlesinger) ‘Australian Real Estate Investment Trusts delivered steady, reliable and in most cases growing distributions to small investors in FY16, analysis by The Australian Financial Review shows. The analysis, ahead of the publication of full-year results next month, shows that fifteen of the 18 trusts in the benchmark S&P/ASX 200 A-REITS index grew … Continue reading

22 July 2016 (AFR) – Three signs investor bullishness is becoming unbearable – Markets ignoring VIX, ‘Crexit’ and emerging market risks

(22 July 2016, AFR, p28, by Karen Maley) ‘Nothing does as much to inspire investor confidence as much as a surging sharemarket. But at a time when the US Dow Jones Industrial Average is celebrating its longest winning streak in years, analysts warn that there are three signs that the market’s mood is getting dangerously … Continue reading

22 July 2016 (AFR) – Perpetual says bank dividends ‘unsustainable’

(22 July 2016, AFR, p19, by James Eyers) ‘One of Perpetual’s leading fund managers says the level of big bank dividends is “simply unsustainable” and has warned investors banks may be forced to slash their payouts in response to weaker earnings and moves by regulators to lift capital. Anthony Aboud, the co-manager of Perpetual’s Pure … Continue reading

22 July 2016 (AFR) – Pumped up shares exit Brexit fears – Australian sharemarket rises past 5500 level shrugging off ‘expensive’ tag

(22 July 2016, AFR, p1, by Vesna Poljak) ‘The Australian sharemarket is the most expensive it has been since the global financial crisis hit our shores as stocks rally through 5500 points for the first time since August 2015. As Wall Street banks post better than expected quarterly earnings pushing the S&P 500 through record territory, and … Continue reading

21 July 2016 (AFR) – Warning crisis indicators flashing red in Asia **

(21 July 2016, AFR, p48, Chanticleer, by Tony Boyd) ‘An early warning indictor system that has reliably signalled two-thirds of the past 50 financial crises in 30 countries since the early 1990s is currently flashing red in relation to Asia. The economies most at risk of being hit by a financial crisis are China and … Continue reading

21 July 2016 (AFR) – Sydney house price back above $1 million: strong June quarter, Domain says

(21 July 2016, AFR, p38, by Michael Bleby) ‘Lower interest rates and a resurgence of investors pushed housing prices higher in the June quarter, with Sydney’s median house price jumping back over the $1 million mark. The pick-up in Sydney’s median house price came in a quarter in which Melbourne, Adelaide and Canberra all posted record … Continue reading

21 July 2016 (AFR) – Developer offers free holidays to apartment buyers

[COMMENT: Now might this be a sign of a bubble that is soon to burst? Caveat Emptor!] (21 July 2016, AFR, p8, by Duncan Hughes) ‘Trips to Europe and luxury Asian resorts are on offer to off-the-plan buyers of Melbourne apartments as rising supply and falling demand increases pressure on developers. Buyers of two or … Continue reading

20 July 2016 (AFR) – Housing affordability has worsened in June quarter: HIA – Melbourne drives decline in housing affordability

(20 July 2016, AFR, p34, by Su-Lin Tan) ‘Housing affordability has slid backwards, worsening over the June quarter, the latest Housing Industry Association’s Housing Affordability Index shows.  Affordability worsened the most in Melbourne after its affordability index fell 7.4 per cent. Canberra dropped 5.7 per cent, and Sydney went back 1.6 per cent. ‘ Read more at AFR.com (might need … Continue reading

20 July 2016 (AFR) – ‘Blind’ investors warned – Citi’s Willem Buiter says the bubble can’t go on forever

(20 July 2016, AFR, p13, by Karen Maley) ‘Investors are “blind” to the risks they are taking on, and have a “desperate need to believe” that robust growth corporate earnings will justify elevated sharemarket levels, despite the “mediocre” outlook for global growth, according to Willem Buiter, Citi’s highly regarded global chief economist.’ Read more at … Continue reading

20 July 2016 (AFR) – Brexit forces IMF to clip growth outlook

(20 July 2016, AFR, p1, by Jacob Greber) ‘The bombshell Brexit vote and other geopolitical risks have forced the International Monetary Fund to scrap plans to upgrade its global economic growth outlook, although the Reserve Bank of Australia appears relieved that financial markets have proven resilient to the shock. ‘ Read more at AFR.com (might need AFR login … Continue reading

19 July 2016 (AFR) – Perth residential vacancies jump to record 5pc

(19 July 2016, AFR, p32, by Michael Bleby) ‘Residential vacancies in Perth jumped to a new high of 5 per cent in June as the WA capital’s housing market continued to weaken.  The city’s vacancy rate rose to double the national average after rising from 4.7 per cent in May, SQM Research said on Monday. ‘ … Continue reading

19 July 2016 (AFR) – The three tests facing the ASX200 – Austrlaian bourse charts course higher, but…

(19 July 2016, AFR, p26, by Jessica Sier) ‘Things are looking good for the Australian sharemarket, with the RBA looking to cut rates in the coming months, commodity prices still finding support across the board and positive news around the US economy meaning appetite for Wall Street is flowing through to our shares. On Friday, … Continue reading

19 July 2016 (TheAge,SMH) – Home loan arrears edging higher

(19 July 2016, The Age, BusinessDay, p23, AAP) ‘The number of housing loans with payments overdue crept up further in May, giving weight to concerns about potential problems emerging for banks if the economy gets into trouble. The latest rise was only small, with 1.14 per cent of loans in arrears, compared to 1.07 per … Continue reading