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28 Feb 2017 (AFR) – Business profits shatter expectations, inventories hold ground

(28 February 2017, AFR, p3, by Jacob Greber) ‘A blockbuster $13 billion surge in business profits last quarter – the biggest jump since 2001 – has stoked speculation of a turnaround in economic growth and spurred hopes of fresh windfalls for shareholders and the federal government’s tax collectors. Companies reported a 20.1 per cent rise … Continue reading

27 Feb 2017 (AFR) – Trump’s tax hurdles hard to climb – Prepares the first shots in his global tax war

(27 February 2017, AFR, p39, by John Kehoe) ‘Bullish investors are anticipating Donald Trump will flesh out his corporate tax plan in a speech to Congress on Tuesday night, but the idea the US will soon have a 15 per cent company rate is a bit fanciful. To be sure, the US is on a … Continue reading

27 Feb 2017 (AFR) – Is Wall Street’s rise a classic “suckers’ rally”?

(27 February 2017, AFR, p28, by Karen Maley) ‘Are we witnessing a classic “suckers’ rally”? If you listen to more bearish analysts, the answer is an emphatic “yes”. They say Wall Street’s prolonged rise – the blue-chip Dow Jones Industrial Average has notched 11 straight record closes, its longest winning streak since early 1987 – bears … Continue reading

27 Feb 2017 (AFR) – Bond yield rally suggests too much good news priced in

(27 February 2017, AFR, p20, by Bill Bovingdon, chief investment officer of Altius Asset Management) ‘The contrast between 2017 and 2016 could hardly be more stark. This time last year, financial markets were in turmoil in response to the US Federal Reserve lifting cash rates for the first time in nearly a decade. Now, following … Continue reading

27 Feb 2017 (AFR) -DJIA winning streak hits 11 ahead of Trump tax cut details

(27 February 2017, AFR, p20, by Vesna Poljak) ‘The Dow Jones Industrial Average set a record high for an 11th session in a row, raising the stakes ahead of United States President Donald Trump’s major congressional address this week which markets are counting on for details of his promised tax cuts. The winning streak on … Continue reading

27 Feb 2017 (AFR) – Resources investment has further to fall: WoodMac

(27 February 2017, AFR, p18, by Angela Macdonald-Smith) ‘Resources investment across Australia is set to plunge by 26 per cent this year and will sink by billions of dollars more over the next two years despite new projects in copper and zinc, according to a new analysis. While a recovery is anticipated in 2020, figures from … Continue reading

27 Feb 2017 (AFR) – As China hits peak iron ore, miners look elsewhere for growth

(27 February 2017, AFR, p13, by Angus Grigg) ‘China has reached peak iron ore usage, which will force lower-grade producers such as Fortescue Metals Group to offer increasingly large discounts to steel mills, according to participants at China’s main iron ore industry conference.  Peak iron ore was not supposed to happen for at least another decade, but Greg … Continue reading

27 Feb 2017 (AFR) – Biggest February weekend ever: auction clearances surge in Sydney, Melbourne

(27 February 2017, AFR, p3, by Michael Bleby) ‘Sydney and Melbourne led a surge in auction clearance rates, despite record numbers of listings, as buyers who missed out late last year competed with a new wave of buyers. Auctions cleared in the NSW capital jumped to a preliminary figure of 81.5 per cent from 80.6 … Continue reading

25 Feb 2017 (AFR) – ASX 200 dividend count heads to record $72 billion on resources comeback

(25 February 2017, AFR, p1, by Vesna Poljak) ‘Australian company dividends are on track to soar to a record $72.3 billion in 2016-17 following a spectacular change of fortunes in the resources sector elevated a slightly improved profit season for industrials stocks and banks. Shareholders have pocketed almost all of the spoils of the estimated … Continue reading

25 Feb 2017 (AFR) – ASX ends week lower on tumbling metal prices

(25 February 2017, AFR, p33, by Myriam Robin) ‘Tumbling metal prices and wobbly global markets dragged the local sharemarket lower on Friday, causing the index to finish the week in the red despite positive earnings results being welcomed by investors. The S&P/ASX200 finished down 0.8 per cent on Friday, and 1.2 per cent over the … Continue reading

24 Feb 2017 (TheAge,SMH) – Official forecasts in doubt with business investment set to fall for fifth consecutive year

(24 February 2017, The Age, BusinessDay, p25, Peter Martin) ‘Business investment looks set to slide for a fifth consecutive year after the release of the first intentions survey for 2017-18, which shows plans down 3.9 per cent on the same survey for 2016-17 a year before.’ Read more at SMH.com.au

24 Feb 2017 (AFR) – Fed worried that the Trump trade could backfire for investors

(24 February 2017, AFR, p31, by Karen Maley) ‘Investors should be very worried. Minutes from the US Federal Reserve’s latest meeting show that policymakers are clearly puzzled why the US sharemarket has moved to such giddy heights given the huge uncertainty over the US economic outlook. This represents a huge shift in attitude for the US … Continue reading

24 Feb 2017 (AFR) – Capex investment strike grinds on; Business keeps brakes on capex

(24 February 2017, AFR, p3, by Jacob Greber) ‘Australia’s long four-year investment slump is set to continue through most of 2017, with official figures showing spending by companies on new buildings, equipment and machinery fell for a fourth straight quarter late last year. Figures published less than a day after Reserve Bank of Australia governor … Continue reading

23 Feb 2017 (AFR) – Positive sentiment for commercial property highest in seven years

(23 February 2017, AFR, p32, by Nick Lenaghan) ‘Confidence in the commercial property sector is at its highest level ever on the back of a boom in hotels and strong returns from city office towers, according to a National Australia Bank survey. The bank’s Commercial Property Index has risen five points to…’ Read more at … Continue reading

23 Feb 2017 (TheAge) – Reserve Bank’s hands tied as wage growth hits new record low

(23 February 2017, The Age, p2, Peter Martin) ‘Private-sector wage growth has slid to a record low of just 1.8 per cent, throwing into doubt budget projections and confounding the Reserve Bank, which would prefer not to have to cut interest rates again and run the risk of reigniting house prices. Reserve Bank governor Philip … Continue reading

22 Feb 2017 (AFR) – Failure of fund managers to match benchmarks builds case for passive funds

(22 February 2017, AFR, p24, by Philip Baker) ‘There’s no doubt 2016 was a tough year for all investors, but was it that bad? The answer is yes if the annual S&P Dow Jones survey of active managers is anything to go by. Less than a quarter of active Australian large-cap equity fund managers outperformed … Continue reading

22 Feb 2017 (AFR) – Active managers deliver worst results since 2009

(22 February 2017, AFR, p15, by James Frost) ‘A report from S&P Dow Jones Indices has confirmed what most industry observers already knew, that calendar 2016 was a poor year for Australian fund managers with the majority of equity and bond funds getting trounced by the benchmark. Analysis of more than 1000 Australian funds from … Continue reading

22 Feb 2017 (TheAge) – Half-time profit season scorecard: more good than bad

(22 February 2017, The Age, BusinessDay, p32, Patrick Commins) ‘More than halfway through the February profit reporting season and analysts are using descriptors such as “so far, so good” and “pleasing”, with a renewed emphasis on dividends and more upbeat company outlooks giving investors something to cheer about. At the start of the busiest week … Continue reading

22 Feb 2017 (TheAge,SMH) – Pandora, Mecca and Mac: The bright spots of Australian retail

(22 February 2017, The Age, BusinessDay, p27, Madeleine Heffernan) ‘Retail has had a rough and ready couple of months, but some companies are hitting it out of the park. Shopping centre owner GPT Group has singled out jewellery retailer Pandora and cosmetics chains Mecca and Mac as star performers.’ Read more at TheAge.com.au

22 Feb 2017 (TheAge,SMH) – Padley: You need to understand brokers’ game – Why investors should be sceptical of broker research

(22 February 2017, The Age, MONEY supplement, p3, Marcus Padley) ‘I get regular emails pointing out how bad broker recommendations have been in hindsight. Most of the finger pointing is simply an investor attempting to transfer the blame to someone else of course, but if the investor is ever going to learn from their mistakes … Continue reading

21 Feb 2017 (AFR) – Reporting season extremes – WorleyParsons and Brambles shock while NIB surprises

(21 February 2017, AFR, p40, by Tony Boyd) ‘The profit reporting season has had its fair share of contrasting results but the bifurcation evident in Monday’s numbers from half a dozen companies was a reminder that continuous disclosure will not protect investors from big surprises.’ <snipped…> ‘Outlook on financial guidance is obviously a grey area. … Continue reading

21 Feb 2017 (AFR) – Good time to be a landlord: Vacancies tighten, Colliers CBD office report says

(21 February 2017, AFR, p30, by Michael Bleby) ‘CBD office vacancies will fall across Australia’s three largest cities over the next year, making it a good time to be a landlord, a Colliers International report shows. Withdrawal of office stock and refurbishing of lesser-grade space to attract smaller tenants in Sydney, falling incentives in Melbourne … Continue reading

21 Feb 2017 (AFR) – Morgan Stanley says momentum investing now cheap in Australia

[COMMENT: Please remember that the below is a news story and an opinion. It is not a recommendation to take any action.] (21 February 2017, AFR, p27, by Myriam Robin) ‘For the first time since 2003, many high momentum stocks are actually cheaper than those with low momentum, Morgan Stanley says. When it comes to … Continue reading

21 Feb 2017 (AFR) – Two valuation methods that make shares look expensive

(21 February 2017, AFR, p26, by Philip Baker) ‘As the local reporting season rolls on two valuation methods may have more of a say about where the sharemarket goes from here. Both make stocks on Wall Street look very expensive. The first is Robert Shiller’s  cyclically adjusted  price-earnings multiple that tries to adjust for the … Continue reading

21 Feb 2017 (AFR) – BlueScope CEO eyes strong housing construction – confident east coast housing boom will roll on

(21 February 2017, AFR, p11, by Simon Evans) ‘BlueScope Steel chief executive Paul O’Malley says the strength in the residential construction sector on the eastern seaboard of Australia still has a “few years to run” and the difficult Western Australian residential building market has now bottomed out.’ Read more at AFR.com (might need AFR login access, or try: … Continue reading

20 Feb 2017 (AFR) – Investors appear confident that things will keep getting better

(20 February 2017, AFR, p28, by Karen Maley) ‘Euphoria has broken out on Wall Street. After finally managing to break through the 20,000 barrier, the Dow Jones Industrial Average has since gone on to record a stunning seven consecutive record closes. Other major US indices such as the Standard & Poor’s 500 and the Nasdaq … Continue reading

20 Feb 2017 (AFR) – Weekend property auction clearances soar in Sydney and Melbourne

(20 February 2017, AFR, p6, by Matthew Cranston) ‘Auction clearance rates soared in Sydney and Melbourne over the weekend, although some property experts questioned whether higher clearance rates would translate into another year of strong price growth. Domain and Corelogic both showed similarly high auction clearance rates for the weekend, with more than 83 per … Continue reading

18 Feb 2017 (AFR) – Reporting Season: Upbeat earnings mood for Australian stocks punctuated by big misses

(18 February 2017, AFR, p17, by Vesna Poljak) ‘Even as the market has climbed 3 per cent, wild share price gyrations for once-loved stocks have forced investors to rethink their strategies. While Boral, CSL and Computershare have delivered, Domino’s, Telstra, Seven West and Magellan have underwhelmed.’ [From the AFR page 1 headline.] ‘The profit season … Continue reading

18 Feb 2017 (AFR) – Miners and banks spur second week of ASX gains

(18 February 2017, AFR, p27, by Myriam Robin and Jessica Sier) ‘The ASX finished the week solidly higher, as mining companies and the big banks helped keep it in the black despite some major stocks disappointing during a busy week of earnings.’ <snipped…> ‘The week’s biggest gainers were almost all exposed to mining amid growing … Continue reading

17 Feb 2017 (AFR) – Brexit blamed for decline in EU workers in Britain

(17 February 2017, AFR, p33, by Gemma Tetlow, Economics Correspondent, Financial Times) ‘The number of EU nationals working in the UK fell in the last quarter of 2016, adding to anecdotal evidence that employers are finding it harder to attract and retain staff from Europe since the Brexit vote. Figures from the Office for National … Continue reading