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30 Nov 2016 (AFR) – New home sales fall to two-year low as houses, apartments drop, HIA figures show

(30 November 2016, AFR, p29, by Michael Bleby) ‘New home sales dropped to a two-year low in October as purchases of both stand alone houses and units tumbled, Housing Industry Association figures show. Total sales fell 8.5 per cent from September to 7094, according to the HIA’s latest New Home Sales report, based on a … Continue reading

30 Nov 2016 (AFR) – Commercial property returns outperform shares but past peak

[COMMENT: Okay, this is interesting; but not very useful. We need to be careful with how we interpret news reports like this one. Firstly, the performance figures for either property or shares will be based on an index, or average, and very few retail investors invest on the basis of trying to track an index … Continue reading

30 Nov 2016 (AFR) – OECD sees resurgent US growth lifting global economy

(30 November 2016, AFR, p11, by Leigh Thomas) ‘Global growth will pick up faster than previously expected in the coming months as the Trump administration’s planned tax cuts and public spending fire up the US economy, the OECD said late on Monday (AEDT), revising up its forecasts. In its twice-yearly Economic Outlook, the Organisation for … Continue reading

29 Nov 2016 (AFR,Telegraph) – Italy needs reform and a euro exit is inevitable

(29 November 2016, AFR, p41, Roger Bootle, The Telegraph) ‘On Sunday Italy goes to the polls to vote, not on membership of the EU, or even of the euro, but rather on an apparently arcane political matter, namely the powers of the upper house of the Italian parliament, the Senate. But there are close connections … Continue reading

29 Nov 2016 (AFR) – Listed companies 50 per cent more likely to fail

(29 November 2016, AFR, p16, by James Frost) ‘Listed companies are up to 50 per cent more likely to fail than private companies because they are structured in a way that encourages them to take more risks, according to a Reserve Bank of Australia discussion paper. Released on November 24 and titled “Why do companies … Continue reading

29 Nov 2016 (AFR) – ‘China’s output curbs will hold up coal prices’ – Domestic coal prices to stay high as China closes down old mines

(29 November 2016, AFR, p12, by Lisa Murray) ‘One of China’s biggest state-owned coal companies says prices will remain “relatively high” next year as the central government remains committed to shutting down old, inefficient mines. Yanzhou Coal Mining Group director and chief financial officer, Zhao Qingchun, told the Australian Financial Review the government was “determined … Continue reading

29 Nov 2016 (AFR) – Full Donald Trump trade war would bring deep recession

(29 November 2016, AFR, p3, by Ben Potter) ‘Donald Trump’s 45 per cent tariffs on Chinese exports to the United States would plunge the world into a deep recession, if China retaliated in kind and the rest of the world took protective action in a global trade war, new modelling shows.’ Read more at AFR.com … Continue reading

29 Nov 2016 (TheAge) – Venezuela’s bolivar currency so devalued it no longer fits in wallets

(29 November 2016, The Age, p12, Sofia Barbarani) ‘Caracas, Venezuela: It’s not easy to find someone who still uses a wallet in Venezuela, where inflation is expected to reach 720 per cent this year and the biggest bill – 100 bolivars – is worth about US5¢ on the black market. The currency has dropped dramatically in value … Continue reading

28 Nov 2016 (AFR) – Trumponomics will struggle to make America great again

(28 November 2016, AFR, p39, by Stephen Roach) ‘Donald Trump’s economic strategy is severely flawed. The US President-elect wants to restore growth via deficit spending in a country with a chronic shortfall of savings. This points to a further compression in national saving, making a widening of an already outsize trade gap all but inevitable. … Continue reading

28 Nov 2016 (AFR) – Chinese-made $100 billion city near Singapore ‘scares everybody’

(28 November 2016, AFR, p34, by Pooja Thakur Mahrotri and En Han Choong) ‘The landscaped lawns and flowering shrubs of Country Garden‘s huge property showroom in southern Malaysia end abruptly at a small wire fence. Beyond, a desert of dirt stretches into the distance, filled with cranes and piling towers that the Chinese developer is … Continue reading

28 Nov 2016 (AFR) – Italy: Investors worry about looming Italian turmoil

(28 November 2016, AFR, p28, by Karen Maley) ‘Investors are on edge as Italian Prime Minister Matteo Renzi battles to stave off a humiliating defeat in a referendum on reforming the country’s constitution, which could trigger a fresh outbreak of turbulence in the eurozone.  After the shock of the Brexit vote in which UK voters … Continue reading

28 Nov 2016 (AFR) – Italy: Investors aren’t waiting for Italy’s big decision

(28 November 2016, AFR, p22, by Carmen Reinhart) ‘Italy’s referendum on December 4 will give voters the opportunity to approve or reject what some have described as the country’s most extensive constitutional reforms since the abolition of the monarchy at the end of World War II. Yet it may be the fact that Italy’s three … Continue reading

28 Nov 2016 (AFR) – Exploration drought stokes gas shortage fears

(28 November 2016, AFR, p18, by Angela Macdonald-Smith) ‘Western Australia is likely to see no onshore exploration wells drilled this year, while offshore drilling also has slumped, fuelling fears of gas shortages on the west as well as the east coast The problem appears most severe in WA, but applies nationwide as some states become off-limits due to drilling … Continue reading

28 Nov 2016 (AFR) – ‘Super Saturday’ auctions in Sydney and Melbourne see strong clearance rates

(28 November 2016, AFR, p2, Su-Lin Tan) ‘Five hundred more auctions across Sydney and Melbourne on Super Saturday weekend compared to a week ago did nothing to cool auction clearance rates in either city. Sydney had a preliminary auction clearance rate of 81.9 per cent – higher than last weekend’s 79.6 per cent – while … Continue reading

28 Nov 2016 (TheAge,SMH) – Black Friday and Cyber Monday keep tills ringing

(28 November 2016, The Age, BusinessDay, p20, Carolyn Cummins) ‘Consumers across the world pumped more than $US6 billion ($8 billion) into the retail sector, of which Australia played its part, during the frenzied shopping days known as Black Friday and extending into Cyber Monday. Two-day sales starting on Thanksgiving in the US last Thursday, totalled $US5.3 billion, marking an 18 per cent increase … Continue reading

26 Nov 2016 (AFR) – Here’s what killed the bond bull – and it wasn’t Trump

(26 November 2016, AFR, p23, by Patrick Commins) ‘If you are wondering how on earth Donald Trump managed to single-handedly flip the script in global financial markets, the answer is: he didn’t. It’s tempting to see it that way, though. After all, all four major US sharemarket indices hit simultaneous record highs this week – … Continue reading

26 Nov 2016 (AFR) – ASX enjoys strong week as commodity rally continues

(26 november 2016, AFR, p27, by: Vanessa Desloire, Jessica Sier) ‘The sharemarket burst through the 5500 level to the highest in three months, as the rally in commodity prices continued amid optimism surrounding President-elect Donald Trump and next week’s OPEC meeting. The Friday session lacked direction early after Wall Street closed for the Thanksgiving Holiday, … Continue reading

25 Nov 2016 (AFR) – Indians rush frantically to launder their black money

(25 November 2016, AFR, p36, by Geeta Anand) ‘Indians’ ingenuity is being mightily tested as they rush to save their “black money,” stashes of hundreds of thousands, even millions, of rupees they have accumulated without paying taxes. For decades, Indians have stuffed their mattresses with 500- and 1000-rupee notes, the most widely circulated bills, worth … Continue reading

25 Nov 2016 (AFR) – Should we take the Trump stock rally seriously?

(25 November 2016, AFR, p29, by John Authers) ‘Can we believe it? The US has had two weeks to digest the fact that it has elected Donald Trump as its next president, and many on both left and right are finding it hard to swallow. The US stock market is just as hard to digest. … Continue reading

25 Nov 2016 (AFR) – Iron ore futures soar again on Chinese steel mill closures

(25 November 2016, AFR, p23, by Lisa Murray) ‘China’s pledge to shut down inefficient steel mills and address chronic pollution has triggered a rally in iron ore futures as traders bet a more profitable steel sector will underpin strong demand for raw materials. Iron ore futures rose more than 6 per cent on Thursday morning … Continue reading

25 Nov 2016 (AFR) – S&P lumps Australian banks with those of Russia and Brazil

(25 November  2016, AFR, p21, by James Frost) ‘Standard & Poor’s has placed the Australian banks in a basket alongside those of Russia, Hong Kong, Brazil, Japan and China in a global outlook for credit quality that identifies banking environments facing negative pressures.  The ratings agency says that 11 of the 20 largest banking markets … Continue reading

25 Nov 2016 (TheAge) – Morgan Stanley warns Australia’s economy may have gone backwards

(25 November 2016, The Age, BusinessDay, p25, Jessica Sier) ‘While markets including the ASX have shot higher following Donald Trump’s surprise election win in the US, some economists suggest Australia might be in for a rude shock. A continued unwind in resource investment, contracting activity in the housing sector, and weaker household incomes are on … Continue reading

24 Nov 2016 (AFR) – Commercial property close to final third of cycle: TIAA’s TH Real Estate

(24 November 2016, AFR, p38, by Matthew Cranston) ‘The commercial real estate cycle is getting closer to its peak and risks are rising according to US financial services giant TIAA’s TH Real Estate, but major investors still have capacity to take advantage of opportunities. TH Real Estate’s Nick Evans, who oversees $1 billion worth of Australian … Continue reading

24 Nov 2016 (AFR) – Wilson Asset Management’s Geoff Wilson’s waiting for the ‘great unwind’ of liquidity

(24 November 2016, AFR, p32, by Philip Baker) ‘The ideal scenario right now for high-profile fund manager Geoff Wilson from Wilson Asset Management is for another global financial crisis to hit. For him, that would be perfect. Nothing better. For sure, shares would be smashed, property too, as he thinks valuations for both those asset classes … Continue reading

24 Nov 2016 (AFR) – Are bonds threatening to rain on Donald Trump’s honeymoon? – Spending spree doubts threaten to curtail honeymoon

(24 November 2016, AFR, p30, by Karen Maley) ‘The euphoric Trump market honeymoon rolled on in Wall Street, lifting the blue-chip Dow Jones Industrial Average above the 19,000 level for the first time, while the S&P 500 breached 2200. Markets have been rallying strongly since Donald Trump’s surprise election victory as investors believe that his … Continue reading

24 Nov 2016 (AFR) – Italy: Matteo Renzi would seek early election after referendum loss

(24 November 2016, AFR, p12, by John Follain) ‘Prime Minister Matteo Renzi’s party would seek early elections in Italy by the summer of 2017 if he were to lose a referendum on constitutional reform, according to a senior official. Lorenzo Guerini, deputy-secretary of Mr Renzi’s Democratic Party, said in an interview that the group would … Continue reading

24 Nov 2016 (AFR) – Property lenders hike rates by 60 basis points

(24 November 2016, AFR, p3, by Duncan Hughes) ‘Lenders are raising the cost of buying property by up to 60 basis points as the impact of the “Trump effect” and growing expectations that central bankers are set to end the era of record low rates ripple through global markets. Rising costs of funding debt are also … Continue reading

24 Nov 2016 (TheAge) – Bets on Trump boosting metal prices further are tempting fate as US dollar soars

(24 November 2016, TheAge, BusinessDay, p20, Ambrose Evans-Pritchard) ‘Rampant speculation and exaggerated hopes of a Trump-led boom have fuelled a blistering rally in industrial metal prices. Oil is perking up and talk of a new commodity supercycle is suddenly on everybody’s lips. It is as if we were returning to the glory days of break-neck … Continue reading

23 Nov 2016 (AFR,LexColumn) – China-led commodities rally about to run out of steam

(23 November 2016, AFR, p23, by The Lex Column) ‘All that Trump campaign chatter about making America great again has done wonders for the US dollar. This past week the greenback hit 13-year highs. Another asset class having a storming year: shares in mining companies. The MSCI world metals and miners index is up 90 … Continue reading

23 Nov 2016 (AFR) – President-elect outlines plans for first day in office

(23 November 2016, AFR, p11, by Melissa Fares and Emily Stephenson) ‘US President-elect Donald Trump outlined plans on Tuesday (AEDT) for his first day in office, including withdrawing from a major trade accord and investigating abuses of work visa programs, and met with Cabinet hopefuls at his Manhattan office tower.’ Read more at AFR.com (might … Continue reading