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1.Market Observations

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15 Dec 2018 (CNBC online) – The S&P 500 and Dow are back in a correction. Here’s what experts are watching for next week

(15 December 2018, CNBC online, Tyler Bailey) ‘Another sharp sell-off has investors reeling on Friday, as the Dow and S&P 500 both dove back into correction territory. The downturn has put more than half of S&P 500 stocks in a bear market, which means they are down more than 20 percent off their recent respective … Continue reading

15 Dec 2018 (AFR) – ASX fails to recover from Monday sell-off

(15 December 2018, AFR, p33, By William McInnes) ‘Australian shares ended the week lower on Friday, weighed by the major banks as the market struggled to rebound from a big sell-off on Monday. The S&P/ASX 200 Index closed 79.5 points, or 1.4 per cent, lower this week at 5602 while the broader All Ordinaries slid … Continue reading

14 Dec 2018 (AFR) – Oil stays below $US52 as investors remain wary over supply outlook

(14 December 2018, AFR, p30, by Sharon Cho) ‘Oil traded below $US52 a barrel after US crude inventories slid less than expected and added to concerns that the OPEC+ coalition’s output cuts won’t be enough to avert a supply glut.’ Read more at (might need AFR login access, or try:

14 Dec 2018 (AFR) – Development bank halts coal financing to combat climate change

(14 December 2018, AFR, p24, by James Kynge and Leslie Hook) ‘London/Katowice | The European Bank for Reconstruction and Development, one of the world’s leading development banks, has voted to adopt a “no coal, no caveats” financing policy and slash lending to oil exploration and production projects as the organisation seeks to combat climate change. … Continue reading

14 Dec 2018 (AFR) – Federal Reserve piles up $US66 billion in paper losses as it faces Trump wrath

(14 December 2018, AFR, p16, by Rich Miller) ‘New York | The Federal Reserve is piling up unrealised losses on its $US4.1 trillion bond portfolio, raising questions about its finances at a politically dicey moment for the independent central bank. The Fed had losses of $US66.5 billion ($92 billion) on its securities holdings on September … Continue reading

14 Dec 2018 (AFR) – Corporate tax take up by $7.4 billion as energy and resources bounce-back

(14 December 2018, AFR, p10, by Tom McIlroy) ‘Australia’s corporate tax take grew by $7.4 billion, or 19 per cent, in 2016-17 as the energy and resources sectors bounced back, coming as the ATO revealed a $1.8 billion gap in revenue from large corporates. Releasing the latest corporate tax transparency report on Thursday, ATO deputy … Continue reading

13 Dec 2018 (AFR) – Macau investor heads for suburban Melbourne in $28m deal

(13 December 2018, AFR, p31, by Nick Lenaghan) ‘Macau investors have bought out an office development at Ringwood in Melbourne’s east fully pre-committed to the government for $28.3 million. The take-out-style transaction was struck on a tight yield of 5.3 per cent, an indicator of the buoyancy in Melbourne’s suburban office markets, where deals completed … Continue reading

13 Dec 2018 (AFR) – China to cut tariffs on imported US cars

(13 December 2018, AFR, p27, Demetri Sevastopulo and James Politi, Financial Times) ‘China has agreed to cut tariffs on imported US cars from 40 to 15 per cent, the first concrete sign of a cooling in the trade war since Xi Jinping and Donald Trump agreed to a 90-day truce.’ Read more at

12 Dec 2018 (AFAR) – Developer Holder East manages just 20 sales out of 200 in South Melbourne tower

[COMMENT: There are currently several of the s-called “$64,000 questions”. Just one of them is whether the situation reported in the news story below is going to have any broader impact on the Australian economy, and on the local building industry, and any of the people who are stuck with over-priced building contracts.] (12 December … Continue reading

12 Dec 2018 (AFR) – Treasury Wines’ painful $4 billion spillage

[COMMENT: Technical analysts (aka chart readers) could have spotted a potential loser here, some months before the share price tanked. They would have trimmed any losses and quite the stock.] (12 December 2018, AFR, p17, by Simon Evans) ‘Old-school investors who believe share sales by directors and top executives are a potential danger signal have … Continue reading

12 Dec 2018 (AFR) – British PM May shelves Brexit vote, turns to intransigent EU for more talks

(12 December 2018, AFR, p11, by Hans van Leeuwen) ‘London | British Prime Minister Theresa May has forestalled a crushing defeat for her Brexit deal in parliament, at the last minute shelving the vote due on Tuesday so that she can pursue further concessions from European leaders, while stepping up preparations for Britain to crash … Continue reading

12 Dec 2018 (TheAge) – House price falls in Sydney and Melbourne are accelerating, new figures show

(12 December 2018, The Age, p3, by Shane Wright) ‘House price falls across Sydney and Melbourne are accelerating according to new data that shows the nation’s key property markets are facing their most challenging period in a decade. The Australian Bureau of Statistics on Tuesday reported capital city prices fell by 1.5 per cent in … Continue reading

11 Dec 2018 (AFR) – Bank stocks push ASX to within inch of two-year low

(11 December 2018, AFR, p13, By Vesna Poljak and Sarah Turner) ‘Bank stocks were the biggest casualties of another epic market rout that put the Australian sharemarket within 20 points of a two-year low on the expectation that US recessionary risk is rising, causing global stocks to fall. But big four banks face challenges above … Continue reading

11 Oct 2018 (AFR) – October housing finance up 2.6pc, first investor rise since February

(11 October 2018, AFR, p6, By Michael Bleby) ‘Investor mortgage lending rose for the first time in eight months in October as loan promises for investment purchases picked up in a more active spring market. The 0.6 per cent monthly gain in investor loan commitments lifted the total to $9.9 billion from $9.8 billion in … Continue reading

11 Dec 2018 (AFR) – Oil keeps rising after OPEC cuts

(11 December 2018, AFR, p29, By Henning Gloystein) ‘Oil prices rose on Monday, extending gains from Friday when producer club OPEC and some non-affiliated producers agreed a supply cut of 1.2 million barrels per day from January.’

11 Dec 2018 (AFR) – Fake and bad news is depressing the market, JP Morgan’s Marko Kolanovic says

(11 December 2018, AFR, p29, By Joanna Ossinger) ‘Biased news outlets, political opportunists and publicity-hungry analysts are whipping the stock market into a frenzy that goes beyond anything justified by economic or earnings fundamentals, according to JP Morgan strategists. Marko Kolanovic, global head of macro quantitative and derivatives research, was among the JPM analysts who … Continue reading

11 Dec 2018 (AFR) – ASX sinks 2pc to 23-month low in rout

(11 December 2018, AFR, p28, By William McInnes) ‘Australian shares tumbled to a 23-month low on Monday on the back of broad selling as every sector in the market closed in the red. The S&P/ASX 200 Index fell 129 points, or 2.3 per cent, to 5552.5, closing within 20 points of a two-year low. “Australian … Continue reading

10 Dec 2018 (TheAge) – O’Dwyer under pressure to address ‘double dipping’ by casual workers

(10 December 2018, The Age, p4, by Dana McCauley) ‘Industrial Relations Minister Kelly O’Dwyer is under pressure to fix casual worker “double dipping” before Christmas, as lawyers prepare to file a massive class-action suit and employers fear they could be exposed to liabilities of up to $8 billion across the economy.’ Read more at

10 Dec 2018 (AFR) – Residential, greenfield land speculators predicted to lose big as market softens

(10 December 2018, AFR, p32, by Luke Housego) ‘Financial Review Young Rich Lister Andrew Welsh is predicting more speculators will forfeit their deposits as settlement deadlines approach and land prices continue to soften. “Speculative land buyers had been contracting to buy residential lots, as well as potential greenfield development sites, but were caught out as … Continue reading

10 Dec 2018 (AFR) – Defying US, OPEC makes deal to cut oil output

(10 December 2018, AFR, p24, by Stanley Reed) ‘Moving to prop up prices, OPEC and its oil-producing allies agreed on Friday to cut production by 1.2 million barrels a day despite pressure from President Donald Trump to maintain current output levels and keep prices low. Saudi Arabia, OPEC’s de facto leader, will make the biggest … Continue reading

10 Dec 2018 (AFR) – The 2018 contrarians who got it right: what they’re saying now

[COMMENT: It is always interesting to look back at the so-called predictions from months ago, and see how many commentators came close to an accurate prediction. Take a look here…] (10 December 2018, AFR, p23, by: Katherine Greifeld, Vildana Hajric, Ben Bartenstein and Aline Oyamada) ‘With just three weeks to go, 2018’s market contrarians are … Continue reading

10 Dec 2018 (AFR) – AMP class action beauty parade turns ugly

(10 December 2018, AFR, p19, by Misa Han) ‘On May 9, a day before AMP’s annual general meeting, boutique class-action specialist Quinn Emanuel filed the first class action against the wealth giant in the NSW Supreme Court.’ <snipped…> ‘It turns out Quinn Emanuel wasn’t the only law firm working towards a tight deadline. At 10.56 … Continue reading

10 Dec 2018 (AFR) – Rioting spreads as anger grows over high French taxes

(10 December 2018, AFR, p13, AAP, Elaine Ganley, John Leicester) ‘The rumble of armoured police trucks and the hiss of tear gas filled central Paris on Saturday, as French riot police fought to contain thousands of yellow-vested protesters venting their anger against the government in a movement that has grown more violent by the week.’ … Continue reading

10 Dec 2018 (AFR) – OECD: House price risks to economy but ‘soft landing’ ahead

(10 December 2018, AFR, p4, by John Kehoe) ‘The weakening property market is a risk to the economy so economic policymakers must stand ready to respond, but a “soft landing” in home prices is the most likely outcome, the Organisation for Economic Co-operation and Development has advised in a detailed review of Australia. The OECD … Continue reading

10 Dec 2018 (AFR) – Loan squeeze sparks call for six-week auction campaigns

(10 December 2018, AFR, p2, by Nick Lenaghan) ‘Loans are taking so long to approve that the typical four-week sales campaign is now too short and should be extended, says a leading property market analyst. The tightening loan approval process is taking its toll on home auction markets with Sydney clearances on Saturday expected to … Continue reading

8 Dec 2018 (CNBC online) – Dow tumbles more than 500 points, wipes out gain for the year to cap wild week on Wall Street

(8 December 2018, CNBC online, Fred Imbert) ‘Stocks dropped sharply on Friday, concluding what has been a wild week for Wall Street. A weaker-than-expected jobs report and China-U.S. trade tensions sent the Dow Jones Industrial Average lower by 558.72 points to 24,388.95 and erased its gains for the year. At one point, the Dow was … Continue reading

8 Dec 2018 (AFR) – ASX rallies despite global stock rout

(8 December 2018, AFR, p33, By William McInnes) ‘Australian shares defied a global stock rout to close the week higher as defensive property and infrastructure stocks held firm. The S&P/ASX 200 Index closed the week 14.3 points, or 0.3 per cent, higher at 5681.5 while the broader All Ordinaries rose 8.6 points, or 0.1 per … Continue reading

7 Dec 2018 (AFR) – US, Australian yield gap could widen further

(7 December 2018, AFR, p31, By Sarah Turner) ‘This week’s weaker-than-expected gross domestic product reading may have disappointed most of the market but it has given bond traders something to smile about, with some expecting the gap between US and Australian 10-year yields to widen further. Third-quarter GDP printed at 0.3 per cent in the … Continue reading

7 Dec 2018 (AFR) – Dovish Bank of Canada signals end of rate tightening cycle

(7 December 2018, AFR, p31, By William McInnes) ‘Disappointing economic data and a more dovish tone from the Bank of Canada may signal that the end of the global rate tightening cycle is approaching. The Bank of Canada turned dovish on Wednesday, when it kept its key cash rate on hold at 1.75 per cent, … Continue reading

7 Dec 2018 (AFR) – Hard to ignore falling global bond yields

(7 December 2018, AFR, p29, By Michael Mackenzie) ‘There was a degree of resilience across global equity markets with Wall Street closed on Wednesday following a nasty tumble for US shares on Tuesday courtesy of a “growth scare” fanned by sliding bond yields. Losses in Asian equities were stemmed after Beijing said it was confident … Continue reading