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1.Market Observations

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13 Oct 2018 (AFR) – ASX ends turbulent week on mildly positive note

(13 October 2018, AFR, p33, by Sarah Turner) ‘Australian shares ended a choppy session on Friday on a mildly positive note, with investors cautiously dipping a toe back into some of the beaten-down areas of the market while keeping a wary eye on the potential for further downside. The ASX ended Friday’s session up 11 … Continue reading

12 Oct 2018 (AFR) – New voco hotel: IHG confident of weathering Melbourne hotel room glut

[COMMENT: I once heard it said that when the next “tallest building”, or “longest bridge” is announced and on the drawing board, then it might come to pass that the market will peak within about two to three years. This one is not touted as such; but it will be tall. Who knows?] (12 October … Continue reading

12 Oct 2018 (AFR) – House prices to fall 15 per cent: Morgan Stanley

(12 October 2018, AFR, p32, by Nick Lenaghan) ‘House prices could fall by as much as 15 per cent peak to trough, according to Morgan Stanley, which has revised its outlook downwards amid weakening economic signals. The latest forecast from Morgan Stanley weighs a series of factors: not only tight credit conditions and rising servicing conditions but also the … Continue reading

12 Oct 2018 (AFR) – Equities smashed in rolling global bear market

(12 October 2018, AFR, p30, by Karen Maley) ‘Has the US share market – which was only recently celebrating its achievement in hitting an all-time high – become the latest shoe to drop as the scourge of tightening financial conditions and escalating trade tensions between the world’s two largest economies works its way through global … Continue reading

12 Oct 2018 (AFR) – US retail giant Sears prepares to file for bankruptcy as shoppers go online

(12 October 2018, AFR, p14, by Jessica DiNapoli and Mike Spector) ‘New York | Sears Holdings is preparing to file for Chapter 11 bankruptcy protection in the coming days following years of declining sales, sources said, casting doubt over the survival of what was once the world’s largest retailer. The bankruptcy filing would end a … Continue reading

12 Oct 2018 (AFR) – Are you ready for Asia’s next financial crisis? – Is the global safety net ready?

(12 October 2018, AFR, p13, by Adam Triggs) ‘ “Brighter prospects, optimistic markets, challenges ahead.” That was the title of the IMF’s World Economic Outlook update in January this year. How quickly things have changed. Since that report was published, turbulence, volatility and crises have dominated the economic landscape. Argentina is in crisis. Turkey is … Continue reading

12 Oct 2018 (AFR) – Donald Trump punctuates market rout with jab at Federal Reserve

(12 October 2018, AFR, p1,by:Vesna Poljak, Sarah Turner, Michael Smith, Jacob Greber) ‘Donald Trump escalated the sell-off sweeping global markets by firing a shot at the Federal Reserve, laying the blame for the worst losses for shares since February at chair Jay Powell and saying the central bank has “gone crazy”. Sharp falls in high-flying … Continue reading

12 Oct 2018 (TheAge) – American ructions behind $50 billion dive in local market

(12 October 2018, The Age, Business, p27, William McInnes & Nick Toscano) ‘Australian shares have suffered a sharp fall amidst heavy selling in global markets as investors worry about the prospect of a trade war with China and the impact of rising interest rates in America. The benchmark S&P/ASX 200 index closed 166 points, or … Continue reading

11 Oct 2018 (AFR) – House building: Think the building boom is over? – Detached home starts at 23-year high, keep activity strong

(11 October 2018, AFR, p46, by Michael Bleby) ‘Housing construction picked up in the year to June, as building of detached houses and both apartments rose to higher levels than in 2017, official figures showed on Wednesday Total dwelling commencements rose to a seasonally adjusted 228,478 in the 2018 financial year, above 221,238 in the previous year as detached … Continue reading

11 Oct 2018 (AFR) – Mortgage delinquency rates highest in outer suburbs: Moody’s

(11 October 2018, AFR, p43, by Ingrid Fuary-Wagner) ‘Homeowners struggling to repay their mortgages are most likely to be found in the outer suburbs of Australia’s cities. A new report from Moody’s Investor Service found that, on average, delinquency rates were lowest within five kilometres of Australia’s CBDs and highest in neighbourhoods 30 to 40 kilometres … Continue reading

11 Oct 2018 (AFR) – First annual unit rent decline in Sydney since 2004: Domain

(11 October 2018, AFR, p43, by Ingrid Fuary-Wagner) ‘Apartment rent prices across Australia dipped over the September quarter, with Sydney weighing slightly on the overall market. Nationally, asking rents for units fell 0.4 per cent to $461 per week in part caused by rental stock in Sydney hitting an all-time high.’ Read more at AFR.com … Continue reading

11 Oct 2018 (AFR) – Perth heads for $1bn in office deals in 2018

(11 October 2018, AFR, p40, by Larry Schlesinger) ‘Sales of Perth office towers are expected to top $1 billion this calendar year in a sign of renewed optimism in the country’s weakest, but improving, capital city office leasing market.’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

11 Oct 2018 (AFR) – Desk space fills at fastest rate in a decade

(11 October 2018, AFR, p40, by Nick Lenaghan) ‘The take-up of office space in the national office market has hit its highest level in more than a decade as white-collar jobs expand, according to quarterly figures compiled by JLL. Those figures show net absorption – the industry term that refers to the amount of space taken up … Continue reading

11 Oct 2018 (AFR) – NAB cuts Sydney, Melbourne housing forecasts further as confidence ‘collapses’

(11 October 2018, AFR, p38, by Michael Bleby) ‘NAB has cut its housing price forecasts for Sydney and Melbourne for the second time in four months, citing a ‘collapse’ in confidence of property professionals in the two largest cities. ‘ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

11 Oct 2018 (AFR) – Expectations on house prices and commercial real estate sliding fast

(11 October 2018, AFR, p38, by Matthew Cranston) ‘Expectations on the availability of credit for buying property are the worst they have been since 2011 with more than twice the number of Australia’s property industry professionals expecting interest rates to rise and house prices as well as shopping centre values to fall over the next … Continue reading

11 Oct 2018 (AFR) – IMF sounds warning on economic risks of household debt and high house prices

(11 October 2018, AFR, p9, by John Kehoe) ‘The International Monetary Fund has ramped up concerns on risks to Australia’s economy from bulging household debt and high house prices, as it warned global asset valuations could “adjust abruptly” due to further US interest rate rises. The IMF’s biannual global financial stability report said international financial … Continue reading

11 Oct 2018 (AFR) – Consumer sentiment lifts despite house and petrol price pressures: Westpac

(11 October 2018, AFR, p7, by William McInnes) ‘Consumer sentiment ticked slightly higher in October, even as the number of negative factors including falling house prices and rising petrol prices weighed confidence. The Westpac Melbourne Institute Index of Consumer Sentiment rebounded 1 per cent to 101.5 and remains above 100 points, a sign that optimists still … Continue reading

11 Oct 2018 (TheAge) – Sydney, Melbourne bear brunt of fall in housing market confidence

(11 October 2018, The Age, Business, p23, by Carolyn Cummins) ‘Confidence in the housing market has slumped with NSW and Victoria the hardest hit due to falling house prices and tightening credit. The latest ANZ/Property Council survey shows property industry confidence in the NSW market has dropped fourteen index points from 134 to 120 over … Continue reading

10 Oct 2018 (AFR) – Chinese buyers protest price drops in toppy property market

(10 October 2018, AFR, p34, by Emma Dong) ‘Shanghai | Home buyers angry that apartments are being sold for much less than they paid swamped property developers’ marketing offices across China over the Golden Week holiday, demanding their money back. A sales centre for Xinzhou Mansion, a project of Country Garden located in Shangrao, a city in Jiangxi … Continue reading

10 Oct 2018 (AFR) – Still a falling market: Sydney house discounts hit 18-month high

(10 October 2018, AFR, p32, by Michael Bleby) ‘House owners looking to sell in Sydney sold in August at an average discount of 6.8 per cent on their original asking price, as selling times lengthened in the country’s biggest city. The discount up from 6.7 per cent in July and more than one-third higher than the … Continue reading

10 Oct 2018 (AFR) – Investors dump growth stocks as they wipe $42.5 billion off ASX

(10 October 2018, AFR, p13, by: Sarah Turner, William McInnes) ‘Investors wiped $42.5 billion off the Australian sharemarket to send it to a fresh four-month low in a torrid session that saw a number of highly valued growth stocks dumped. Fresh highs for US 10-year Treasury yields and ongoing tensions between the US and China … Continue reading

10 Oct 2018 (AFR) – Trade war ‘negative’ for Australia, world economic growth to ‘plateau’: IMF

(10 October 2018, AFR, p6, by John Kehoe) ‘Australia’s strong economic growth is tipped to peak at a six-year high of 3.2 per cent in 2018 before the US-China trade war slows the export-dependent local economy next year, according to the International Monetary Fund’s latest world economic outlook (WEO). The IMF forecasts the world economic … Continue reading

10 Oct 2018 (TheAge) – China appears to blink in trade confrontation with the US

(10 October 2018, The Age, Business, p25, by Stephen Bartholomeusz) ‘There’s a whiff of fear in the air in China as escalating trade frictions with the US begin to impact on an economy that had its own pre-existing issues. Returning after a week-long national holiday, China’s stock markets and its currency were rattled on Monday … Continue reading

9 Oct 2018 (AFR) – Dark clouds gather over the US housing market

(9 October 2018, AFR, p32, by Rana Foroohar) ‘The US economy is white hot. Consumer confidence is higher than it has been since the 1990s. Unemployment just hit its lowest level since 1969. Using amazingly bold language for a central banker, US Federal Reserve chairman Jay Powell says he is “very happy” about the ” … Continue reading

9 Oct 2018 (AFR) – Tech stock rout could bring about value buying opportunity

[COMMENT – Now I have a real problem with this article. It talks about buying opportunities in the market, even though the share prices of some stocks might still be falling. This is crazy “advice”.] (9 October 2018, AFR, p28, by William McInnes) ‘Investors keen on snapping up a bargain could use recent falls in technology … Continue reading

9 Oct 2018 (AFR) – India’s aluminium makers win Japan sales amid market upheaval

(9 October 2018, AFR, p11, by Yuka Obayashi and Sudarshan Varadhan) ‘Tokyo/New Delhi | Indian aluminium makers including Hindalco Industries and Vedanta are boosting sales to Japan as US sanctions against Russia’s Rusal and import tariffs shake up traditional supply routes. India’s product has generally not been regarded as high enough quality by Japan’s demanding … Continue reading

9 Oct 2018 (AFR) – China stocks fall as hostile Trump overshadows looser bank lending

(9 October 2018, AFR, p11, by: Michael Smith, Sarah Turner) ‘Shanghai/Sydney | China’s stockmarket fell 3.7 per cent on Monday after the country returned from a week-long break to growing fears about rising US hostilities, and the long-term effect of a trade war on the world’s second-largest economy. A move by Beijing over the weekend … Continue reading

8 Oct 2018 (AFR) – Hong Kong home prices fall for the first time in 29 months

(8 October 2018, AFR, p36, Reuters) ‘Hong Kong private home prices fell in August for the first time in 29 months and are expected to soften further as interest rates rise and the Sino-US trade war clouds the outlook for the city’s economy. Prices eased 0.076 per cent last month from July, government data showed. While slight, … Continue reading

8 Oct 2018 (AFR) – Tighter credit: Cladding secrecy creates information gap for banks, lenders

(8 October 2018, AFR, p33, by Michael Bleby) ‘Secrecy around the cladding on hundreds of apartment towers nationally is making it harder for banks to lend on apartments at a time when lending is already tight. The lack of disclosure around cladding risks of apartments has already prompted one Victorian investor to seek access to … Continue reading

8 Oct 2018 (AFR) – Rising bond yields will hurt global equity markets – could end bull market

(8 October 2018, AFR, p22, by William McInnes) ‘Veteran investor Geoff Wilson says further rises in US bond yields could spell the end of the longest bull market in history. On Friday, the 10-year Treasury bond yield hit a fresh seven-year high of 3.23 per cent on the back of US employment data. While the … Continue reading

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