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1.Market Observations

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19 June 2019 (TheAge) – RBA rate cut prospects drive ASX gains

(19 June 2019, The Age, Business, p29, By Luke Housego) ‘Rising expectations of further interest rate cuts drove Australian shares higher on Tuesday, as the Reserve Bank’s minutes from its June meeting revealed the possibility of two rate cuts before the end of the year. The benchmark S&P/ASX 200 advanced 39.1 points, or 0.6 per cent, … Continue reading

19 June 2019 (TheAge) – More rate cuts loom for ailing economy – CBA tips rates to hit 0.75% within months as RBA signals further cuts

(19 June 2019, The Age, p1, By Eryk Bagshaw and Shane Wright) ‘Australia’s biggest lender has predicted interest rates will fall below 1 per cent by November, as the Reserve Bank looks to jolt the economy out of a stupor while Parliament argues over tax cuts. The Commonwealth Bank jumped on signals from the central … Continue reading

18 June 2019 (TheAge) – Trump trade fight escalates as India raises tariffs

(18 June 2019, The Age, Business, p21) ‘Mumbai: India has announced it would raise tariffs on 28 categories of imports from the United States, the latest escalation in what has been a slow-motion trade fight between the two countries. The increased tariffs, on $1.4 billion of goods, went into effect Sunday morning in India and … Continue reading

14 June 2019 (AFR) – ASX ends week at fresh 11-year high

(14 June 2019, AFR, p33, William McInnes, Reporter) ‘The Australian sharemarket ended the week at a fresh 11-year high as a surge in iron ore prices bolstered mining stocks. The S&P/ASX 200 Index rose 110.1 points, or 1.7 per cent, to 6554 this week while the broader All Ordinaries advanced 108.4 points, or 1.7 per … Continue reading

14 June 2019 (AFR) – China’s iron ore retreats after three-day surge to record high

(14 June 2019, AFR, p31, Enrico Dela Cruz) ‘China’s iron ore futures declined on Thursday as market participants locked in some gains after the steelmaking feedstock’s three-day surge to record highs earlier this week. But expectations of tight supply and brisk demand were seen intact, limiting the downside.’ Read more at AFR.com (might need AFR … Continue reading

14 June 2019 (AFR) – Investors bet RBA will do ‘whatever it takes’ to support ASX, bonds

(14 June 2019, AFR, p31, Sarah Turner, Reporter) ‘Bond and share prices are pushing toward multi-year highs in Australia, raising the stakes for investors who appear to be betting the RBA will do “whatever it takes” to stimulate inflation. The S&P/ASX 200 has jumped 15.9 per cent this year and is approaching the peak reached … Continue reading

14 June 2019 (AFR) – Jobs data puts heat on RBA for more cuts

(14 June 2019, AFR, p4, Matthew Cranston, Reporter) ‘The highest growth rate in jobs for more than a year, rebounding iron ore prices and the ASX-200 near an 11-year high has not changed the financial market’s view that the Reserve Bank will have to cut rates again next month. The economy created 42,300 new jobs … Continue reading

14 June 2019 (TheAge) – Recession-like conditions: Kmart and Target are being infected by Australia’s retail malaise

(14 June 2019, The Age, Business, p30, Stephen Bartholomeusz, Senior business columnist) ‘The downgrades to Kmart and Target department store sales and earnings that Wesfarmers announced ahead of its annual strategy briefing today is consistent with the depressed state of consumer confidence and a weakening economy and adds to the pressure on the Morrison government … Continue reading

14 June 2019 (TheAge) – Rise in home buyer defaults hits developer Stockland

(14 June 2019, The Age, Business, p33, By Carolyn Cummins and Simon Johanson) ‘A rise in home buyers defaulting on house-and-land sales has prompted Stockland, one of the country’s largest residential developers, to warn it will impact on the group’s second half earnings.’ Read more at TheAge.ocm.au

13 June 2019 (AFR) – China posts worst-ever monthly decline in car sales

(13 June 2019, AFR, p13, Yilei Sun and Brenda Goh) ‘Beijing/Shanghai | China reported the worst-ever monthly sales drop in the world’s largest vehicle market on Wednesday, exacerbating concerns over the country’s economic slowdown and growing impact of an ongoing trade war with the United States. Sales tumbled 16.4 per cent in May from the … Continue reading

13 June 2019 (AFR) – Consumer confidence falls despite RBA cut

(13 June 2019, AFR, p8, Bo Seo, reporter) ‘The Reserve Bank’s decision to cut rates to a record low has failed to boost consumer confidence, according to Westpac and ANZ. Westpac’s consumer sentiment index dipped 0.6 per cent in June from May. Its survey found that responses collected after the RBA rate cut showed less … Continue reading

13 June 2019 (TheAge) – Just on the QE, RBA looking at extreme options if economy turns sour

(13 June 2019, The Age, p29, By Stephen Bartholomeusz) ‘With the Reserve Bank’s cash rate expected to be reduced to 1 per cent, if not lower, later this year it isn’t surprising there is discussion about the prospect of the RBA deploying unconventional measures if the economy continues to slow. Quantitative easing (QE) – the … Continue reading

12 June 2019 (AFR) – 10 per cent cancellation rate: Australia 108 sales going backwards

(12 June 2019, AFR, p37, Larry Schlesinger, reporter) ‘Amid falling valuations, buyers have walked away or defaulted on more than 100 completed apartments bought off-the-plan at Melbourne super skyscraper Australia 108, new figures show.’ <snipped…> ‘Research house Urbis found just 7 per cent of new apartment stock it monitored in Melbourne sold over the first … Continue reading

12 June 2019 (AFR) – Business conditions deteriorate but confidence up: NAB

(12 June 2019, AFR, p7, Matthew Cranston, Reporter) ‘Business conditions have deteriorated, with declines in both forward orders and profitability according to the latest NAB Business Survey, but economists cautioned not to read to much into the result given the proximity to the federal election. Business confidence experienced its biggest monthly uptick in almost six … Continue reading

12 June 2019 (AFR) – ASX up 1.6pc as investors bet on stimulus

(12 June 2019, AFR, p1, Patrick Commins and William McInnes) ‘The ASX blew past an 11-year high on Tuesday, confirming Australia’s position as one of the top performing sharemarkets in 2019 as investors bet that RBA rate cuts and fiscal stimulus will bolster economic growth and boost company profits. The decision by US President Donald … Continue reading

12 June 2019 (TheAge) – ASX extends 11-year high on US-Mexico deal

(12 June 2019, The Age, Business, 29, By William McInnes) ‘Australian shares rose to an 11-year high on Tuesday after the United States scrapped its threat to impose tariffs on Mexican imports, which lifted global investor optimism. The S&P/ASX 200 Index rose 102.4 points, or 1.6 per cent, to 6546.3, beating the previous high of … Continue reading

11 June 2019 (TheAge) – ‘Relatively bleak’: The Star axes 400 jobs amid profit forecast slump

(11 June 2019, The Age, Business, p21, By Josh Dye) ‘Casino giant Star Entertainment Group will begin slashing hundreds of jobs within days as it tries to counter a dive in demand from wealthy offshore VIP gamblers that has sparked warnings about the health of the wider sector.’ Read more at TheAge.com.au

11 June 2019 (AFR) – WA farmers back in business as rain soaks wheatbelt

(11 June 2019, AFR, p11, Brad Thompson, Reporter) ‘Farmers in Western Australia are back on track to produce another substantial grain crop and have doubled down on barley production despite the lingering threat of China imposing bans on the multibillion-dollar trade. Rain has soaked the state’s vast grain-growing belt over the past few days and … Continue reading

11 June 2019 (TheAge,SMH) – It’s time to start worrying about the US economy

(11 June 2019, The Age, Business, p28, By Matt O’Brien) ‘For the first time in a long time, the recovery of the US economy looks like it might be starting to sputter a little bit. Everywhere you look, after all, there’s been less than stellar news recently. Consider the fact that the economy not only … Continue reading

8 June 2019 (AFR) – Rate cut sets up ASX for record high

[COMMENT: Warning!! Take care with opinions like those expressed in this news article. They may or may not prove correct.] (8 June 2019, AFR, p25, Sarah Turner, Reporter) ‘The first interest rate cut in almost three years lit a fire under the ASX and investors are now taking a deeper look at sectors such as … Continue reading

8 June 2019 (AFR) – ‘Check your airbags’: Investors brace for creative destruction

(8 June 2019, AFR, p15, Patrick Commins, Columnist) ‘Perhaps the most disconcerting aspect among the many troubling features of today’s global financial markets is that few profess to know where we go from here. This is not a statement in the sense of “nobody knows what tomorrow will bring”, although that is undoubtedly true. Rather, … Continue reading

8 June 2019 (AFR) – Banks slash savers’ rates and term deposits

(8 June 2019, AFR, p6, Duncan Hughes, Reporter) ‘Lenders are slashing term deposits and savings rates by more than double the 25 basis point reduction in cash rates by the Reserve Bank of Australia, with more cuts expected, according to analysts. Some lenders, such as Westpac and ANZ, made term deposit rate cuts on Tuesday … Continue reading

8 June 2019 (AFR) – Dovish central banks rescue ASX from sell-off

(8 June 2019, AFR, p33, William McInnes, Reporter) ‘Australian shares recovered from a sell-off on Monday to close the week higher as the RBA cut rates and other global central banks turned dovish. The S&P/ASX 200 Index rose 47 points, or 0.7 per cent, to 6443.9 while the broader All Ordinaries added 33.4 points, or … Continue reading

7 June 2019 (AFR,NYTimes) – Oil prices weaken – that’s worrying too

(7 June 2019, AFR, p16, By Clifford Krauss, New York Times) ‘A couple of months ago, the bulls ran the oil markets. Now the bears have taken over. Always volatile, oil prices have tumbled more than 20 percent since late April because of growing fears that demand is weaker than expected as the global economy … Continue reading

7 June 2019 (TheAge) – This weekend may be the last chance to head off a global downturn

(7 June 2019, The Age, Business, p28, Stephen Bartholomeusz, Senior business columnist) ‘A bear market in US oil, a plunge in the copper price and worrying signs in the bond market add to the sense of foreboding that is now emanating from central banks and the global economic agencies. Since the breakdown of the trade … Continue reading

6 June 2019 (TheAge) – No need for panic, but the government may need another economic plan

(6 June 2019, The Age, p6, By Shane Wright) ‘The economy is tanking. The Reserve Bank is slicing rates to a level not even considered during the Great Depression. And Donald Trump is playing tariff roulette with China. But none of this is going to have the freshly re-elected federal government panicking. Yet. The national … Continue reading

6 June 2019 (AFR) – Demand for property slumps 20pc

(6 June 2019, AFR, p41, Duncan Hughes, Reporter) ‘Demand for housing by new and existing residential property buyers slumped by nearly 20 per cent during the first three months of year, despite lower interest rates, improved affordability and cheaper prices, according to new analysis. But the recent federal election outcome, more rate cuts, improving confidence … Continue reading

6 June 2019 (AFR) – The bottom is in sight, but wait for the rebound – Let’s not get ahead of ourselves

(6 June 2019, AFR, p33, Robert Harley, Contributor) ‘Let’s not get ahead of ourselves. Sure, the house price slide is coming to an end. But a sharp rebound in general prices is unlikely, and from, a social and economic perspective, unwanted. The sentiment towards housing has clearly turned. The Commonwealth Bank, Mirvac and Stockland have … Continue reading

6 June 2019 (AFR) – $1.8 billion of big ticket Brisbane properties in play

(6 June 2019, AFR, p32, Ingrid Fuary-Wagner, Reporter) ‘Deep-pocketed investors with an eye on Brisbane’s CBD are more spoilt for choice than ever before, with about $1.8 billion worth of big-ticket commercial properties on the market or in due diligence. Owners of large-scale towers in the Queensland capital are cashing in on fresh interest from … Continue reading

6 June 2019 (AFR) – Meriton Altitude apartment resold at 23pc below off-the-plan price

(6 June 2019, AFR, p30, Su-Lin Tan, Reporter) ‘A two-bedroom apartment at Meriton’s Altitude apartment tower in Parramatta in Sydney’s west has sold at 23 per cent below its off-the-plan price, as the apartment market continues to struggle.’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

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