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21 July 2018 (AFR) – ASX notches up a positive week as Afterpay Touch rallies

(21 July 2018, AFR, p33, by Sarah Turner) ‘Afterpay Touch was the standout in Australian trading during the week, a five-day stretch where the market managed an overall gain despite ongoing concern about the outlook for global trade. The S&P/ASX 200 climbed 23 points, or 0.4 per cent, to 6285 on Friday for a 0.3 … Continue reading

20 July 2018 (AFR) – Pay attention to the bond market’s message: Lazard

(20 July 2018, AFR, p29, by Jonathan Shapiro) ‘Federal Reserve chairman Jerome Powell may be advising investors not to get caught up in the bearish signals being transmitted by the bond market, but analysts say the predictive powers of the yield curve are too strong to ignore. “We are of the view that the bond … Continue reading

20 July 2018 (AFR) – A China borrower’s $14b debt pile comes crashing down

(20 July 2018, AFR, p26, by Bloomberg News) ‘China this month recorded one of its biggest corporate-debt defaults yet, with the downfall of a coal miner that had ridden the country’s wave of credit until policy makers changed the game with their deleveraging campaign. For investors in Wintime Energy it’s been far from a winning time … Continue reading

20 July 2018 (AFR) – Selector, Bennelong, Platypus are Mercer’s top three Australian funds for 2018

[COMMENT: Another report on fund manager performance, with the usual warnings: be careful about interpreting these results over particular time windows, and noting that some fund managers cannot repeat their performance year after year.] (20 July 2018, AFR, p15, by: Sarah Turner, Vesna Poljak ) ‘What you didn’t own mattered just as much as what … Continue reading

20 July 2018 (AFR) – Housing affordability improves as prices ease, Housing Industry Association says

(20 July 2018, AFR, p6, by Michael Bleby) ‘Housing affordability will continue to improve in Sydney and Melbourne as a cyclical dip causes prices to fall further and earnings keep growing, the Housing Industry Association says. The dip in prices that pulled home values down 1 per cent in the NSW capital and 0.8 per … Continue reading

19 July 2018 (AFR) – Is Lloyd Blankfein’s departure a sign of a doom ahead?

(19 July 2018, AFR, p28, by Karen Maley) ‘Lloyd Blankfein’s decision to step down after 12 years at the helm of US investment banking giant Goldman Sachs has sent shivers down the spines of many investors who fear it could portend a period of share market turmoil. After all, the perspicacious Blankfein has a track … Continue reading

19 July 2018 (AFR) – Global fund managers turning bearish

(19 July 2018, AFR, p26, by Timothy Moore) ‘Global fund managers have turned bearish, significantly lowering expectations for corporate earnings over the next year, according to Bank of America Merrill Lynch. “Investor sentiment is bearish this month, with survey respondents eyeing the risks from a possible trade war,” said Michael Hartnett, BAML’s chief investment strategist. “Equity allocation has fallen … Continue reading

19 July 2018 (AFR) – Fund managers put a ‘magic number’ on bonds versus equities

(19 July 2018, AFR, p25, by Sarah Turner) ‘US Treasury yields need to climb to 3.6 per cent to prompt a wholesale switch from equities to bonds. That’s the “magic number” for 231 fund managers surveyed by Bank of America Merrill Lynch for its July fund manager survey. That level represents the average weighted mid-point … Continue reading

19 July 2018 (AFR) – Super funds notch up ‘stellar’ ninth year of growth

[COMMENT: Here is another one of those reports of the performance of superannuation funds. We need to be careful about interpreting these results because of the time window for the comparison – which in this case is towards the bottom of the GFC and not the market peak prior. And we need to remember that … Continue reading

18 July 2018 (TheAge,SMH) – RBA ‘monitoring’ household debt as trade tensions escalate

(18 July 2018, The Age, p2, Eryk Bagshaw) ‘Australia’s housing obsession in urban centres, low interest rates and financial deregulation have driven the country’s household debt to among the highest in the developed world, leaving it vulnerable to an economic shock, the Reserve Bank has warned.’ Read more at SMH.com.au

18 July 2018 (TheAge) – Fashion flops as food dominates suburban strips

(18 July 2018, The Age, Business, p24, Nicole Lindsay) ‘Melbourne’s iconic suburban shopping strips have weathered the worst of a perfect retail storm, with only Chapel Street, South Yarra and Bridge Road, Richmond still mired in high vacancies. Fitzroys’ Walk the Strip report shows vacancies have tightened across most of Melbourne’s key retail strips in … Continue reading

18 July 2018 (TheAge,SMH) – Dobbed in: ASIC reports rise in ‘bad apple’ financial advisers

(18 July 2018, The Age, Business, p22, Ruth WIlliams) ‘The corporate regulator says it is witnessing a spike in the number of “bad apple” financial advisers dobbed in by their former employers, a “positive development” in a sector notorious for allowing poor performers to move from firm to firm. The Australian Securities and Investments Commission’s … Continue reading

18 July 2018 (AFR) – Sydney (housing) is now a market for buyers and renters: SQM

(18 July 2018, AFR, p30, by Su-Lin Tan) ‘Sydney’s rental vacancy hits a 13-year high in a further signal of the continued downturn in the property market. In SQM Research’s latest June update of rental vacancies, Sydney’s vacancy rate was at 2.8 per cent – nearly a percentage point higher than the same time last year … Continue reading

18 July 2018 (AFR) – Why the Reserve Bank is happy to see Sydney, Melbourne house prices edge lower

(18 July 2018, AFR, p28, by Karen Maley) ‘The Sydney and Melbourne property markets are gradually deflating, and the Reserve Bank of Australia couldn’t be happier. That’s the clear message from the minutes of the RBA’s latest board meeting, held a fortnight ago. Judging from the minutes, the RBA board spent much more time than … Continue reading

18 July 2018 (AFR) – FAANGs battle to meet lofty growth expectations – Does Netflix signal the end of tech’s stellar run?

(18 July 2018, AFR, p27, by Jonathan Shapiro) ‘Is the savage “after-market” reaction to Netflix’s subscriber growth “miss” a sign that the remarkable run in technology stocks could be coming to an end? That is the question on the minds of traders as they head into what could be a critical quarterly earnings season for … Continue reading

18 July 2018 (AFR) – ‘No strong case’ for near-term interest rate hike: RBA

(18 July 2018, AFR, p5, by Vesna Poljak) ‘The Reserve Bank of Australia has declared it will remain vigilant around high levels of household indebtedness, leading economists to conclude that the central bank needs to see convincing inflation and growth before considering raising interest rates in 2019. The Reserve Bank conducted a special discussion of … Continue reading

17 July 2018 (AFR) – China’s June property investment growth weakest in six months

(17 July 2018, AFR, p32, by Yawen Chen and Clare Jim) ‘China’s property investment posted its weakest growth in six months in June as developers faced fresh curbs and tighter funding conditions, with sales also slowing, in a sign one of the economy’s key drivers was losing steam. Growth in real estate investment, which mainly … Continue reading

17 July 2018 (AFR) – Office demand hits 783,000sq m, strongest in 10 years

(17 July 2018, AFR, p32, by Larry Schlesinger) ‘Enquiries for office space in the major capital city markets surged to a decade high of more than 783,000 square metres in the second quarter of the year, according to the latest Colliers International Office Demand Index. The quarterly index, a leading indicator of future take-up of … Continue reading

17 July 2018 (AFR) – CBA farm account bungle puts risk back in the spotlight

[COMMENT: The Hayne Royal Commission continues to reveal horror stories with us, some of which shatter any trust we might have had in the “banks”. This is a sample of what can go wrong when borrowing from a bank.] (17 July 2018, AFR, p11, by James Frost) ‘Systems that allowed thousands of Commonwealth Bank customers … Continue reading

17 July 2018 (AFR) – China’s GDP growth slows to 6.7 per cent in second quarter amid trade war fears

(17 July 2018, AFR, p10, by Michael Smith) ‘China’s economy grew at 6.7 per cent in the second quarter as expected but growth is slowing as the central government’s clampdown on risky debt holds back investment. Economists are focusing on what measures Beijing will take to maintain financial stability as Donald Trump’s trade war looms as a … Continue reading

17 July 2018 (AFR) – CBA, Westpac and Suncorp cut discount rates by up 55bp

(17 July 2018, AFR, p6, by Duncan Hughes) ‘Commonwealth Bank, Westpac Group and Suncorp are slashing honeymoon rates on home loan products, in a bid to stimulate growth as real estate markets slow. Three of the top five mortgage lenders are flexing their balance sheet muscle to offer discounts of up to 55 basis points … Continue reading

17 July 2018 (TheAge) – IMF delivers stark warning on Trump tariffs

(17 July 2018, AFR, p8, Eryk Bagshaw) ‘The International Monetary Fund has warned US President Donald Trump’s trade dispute with China is putting global growth at risk and urged governments to start putting money away to protect against a downturn. In a report due to be released on Tuesday, the Washington-based global financial watchdog described … Continue reading

17 July 2018 (AFR) – Netflix subscriber growth misses its own expectations

(17 July 2018, AFR, online, by Lucas Shaw) ‘Netflix plummeted in late trading after posting disappointing subscriber growth in the latest quarter, threatening the run of one of Wall Street’s hottest stocks. Netflix added 5.2 million users in the second quarter, about a million fewer than the company predicted. Its outlook for the current quarter … Continue reading

16 July 2018 (AFR) – Stage set for strong US earnings season, but after that it will get much tougher

(16 July 2018, AFR, p20, by Timothy Moore) ‘Corporate America, helped this year by lower taxes and an economic boom that has unexpectedly bolstered sales, is poised to report yet another surge in profits for the June quarter. There are signs, however, that the rate of profit growth is poised to shift dramatically lower.’ Read … Continue reading

16 July 2018 (AFR) – School holidays, tight financing to push Sydney clearances below 50 pc again

(16 July 2018, AFR, p7, by Michael Bleby) ‘Sydney’s slowing residential market is on track to record its fourth week this year below-50 per cent auction clearance rates, as ever-tighter lending slows conditions further in the country’s largest city.  In a school holiday market where the number of scheduled auctions slowed to 403 from the previous week’s 552 auctions, … Continue reading

14 July 2018 (AFR) – China trade surplus with US hits record as tensions rise

(14 JUly 2018, AFR, p13, Bloomberg News) ‘China’s monthly trade surplus with the United States rose to a record in June and exports to the nation also soared, underlining the cause of an escalating trade war between the world’s two largest economies. The trade surplus with the US was $US28.97 billion, the highest in any month … Continue reading

14 July 2018 (AFR) – Farmers cheer record wool prices

(14 July 2018, AFR, p5, by Sarah Turner) ‘Australia’s wool farmers are hopeful record  wool prices will provide some protection from the heartbreaking cycles of boom and bust that have traditionally been their lot. The benchmark Eastern Wool Indicator crossed over the $20 a kilo mark for the first time recently and continues to advance as … Continue reading

14 July 2018 (AFR) – Global hedge funds circling increasingly volatile local property market

(14 July 2018, AFR, p4, by Duncan Hughes) ‘Global hedge funds are working on sophisticated trading strategies for shorting Australian property stocks as the sector slowly shrugs off its reputation for “widow-maker” trades, according to hedge fund managers and analysts. A flood of warnings about deteriorating market conditions and the flow-on impact for the broader … Continue reading

14 July 2018 (AFR) – Funding cost spike slugs borrowers

(14 JUly 2018, AFR, p1, by Jonathan Shapiro) ‘The crisis-like spike in Australian bank funding costs has forced more lenders to slug borrowers with “out of cycle” mortgage rate rises, heightening speculation all borrowers will have to pay more on their home loans within months.  On Friday, $5.5 billion regional bank Bendigo and Adelaide Bank … Continue reading

14 July 2018 (AFR) – ASX has steady week as trade tensions strengthen $US

(14 July 2018, AFR, p33, by William McInnes) ‘The Australian sharemarket has closed the week flat, following days of turbulent trading as the US-China trade saga continues to leave investors uncertain. The S&P/ASX 200 index fell 3.9 points, or 0.1 per cent, to 6268.4 this week, as the United States announced further tariffs on an extra $US200 … Continue reading

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