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2.Economic forecasts

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15 June 2017 (AFR) – Commodity prices likely to be softer, due to China

(15 June 2017, AFR, p40, by Alexandra Cain) ‘Mining commodity prices are expected to decline over the next 12 months, largely as a result of slowing demand from China. But supply dynamics in markets such as iron ore and oil will also play a role in moving prices. “Our negative outlook is driven by end-user … Continue reading

14 June 2017 (AFR) – NAB survey shows business conditions best since pre-GFC

(14 June 2017, AFR, p6, by Jacob Greber) ‘An influential survey – watched closely by the Reserve Bank of Australia – which showed businesses have just enjoyed the best month since the 2008 global financial crisis may be giving a more accurate reading of how the economy is doing than last week’s weather-blighted GDP report. … Continue reading

7 June 2017 (AFR) – House price growth to slow to 1.9pc as credit tightens: ANZ

(7 June 2017, AFR, p4, by Michael Bleby) ‘Housing price growth peaked earlier this year and will slow to a pedestrian 1.9 per cent by next year as lending constraints tighten and other measures such as taxes on vacant properties take hold, ANZ says in a new research report. Population increase and demand for housing … Continue reading

3 June 2017 (AFR) – Europe strengthens its hand – for the time being – Six months on and Europe has a spring in its step

(3 June 2017, AFR, p21, by Andrew Clark) ‘Six months ago Europe was on the ropes. France and Holland were under siege from the nativist right, the euro was ailing, panic was spreading about a refugee influx, Britain voted to Brexit, and an assertive Donald Trump was elected US President. Just six months later France … Continue reading

2 June 2017 (AFR) – May factory data point to big China slowdown

(2 June 2017, AFR, p14, by Angus Grigg) ‘China’s efforts to reduce high debt levels across the economy have begun to affect growth, with a key gauge of manufacturing activity falling for the first time in almost a year during May. The Caixin General Manufacturing PMI, released on Thursday, dropped by 0.7 points to 49.6 … Continue reading

2 June 2017 (AFR) – Capex rises for the 1st time in 5 quarters, retail sales surge 1pc

(2 June 2017, AFR, p4, by Jacob Greber) ‘A four-year slide in investment by companies shows nascent signs of bottoming out as firms boosted spending for the first time in five quarters and upgraded their outlook for the coming financial year. While the shift is unlikely to deliver any significant uptick in overall economic growth – … Continue reading

2 June 2017 (TheAge) – Treasurer Scott Morrison sounds warning over economic growth as GDP forecasts turn negative

(2 June 2017, The Age, page 1, James Massola, Peter Martin) ”Treasurer Scott Morrison has begun preparing the ground for weak or negative economic growth as the National Australia Bank marks down its forecasts, predicting a contraction of 0.1 per cent in the March quarter, making it the second quarter in three the economy has … Continue reading

30 May 2017 (TheAge) – No rose-coloured glasses: Treasury secretary John Fraser says this time things really are picking up

(30 May 2017, The Age, p5, Peter Martin) ‘Treasury secretary John Fraser has defended his budget forecast for economic growth, saying there are indications “the long period of growth undershooting forecasts is beginning to come to an end”. In the past three budgets the Treasury has forecast a lift in economic growth of 3 per … Continue reading

29 May 2017 (AFR) – Not a great start to the year – Investment signs point to slowdown

(29 May 2017, AFR, p30, by Philip Baker) ‘There’s a good chance the Australian sharemarket is telling us something about the economy. And it’s not good. Earlier this month, shares were threatening to break the key 6000 level, but since then have ricocheted back hard away from that number. It’s almost as if shares are … Continue reading

27 May 2017 (AFR) – Economy hit by spending strike, cyclone

(27 May 2017, AFR, p1, by: Simon Evans, Carrie LaFrenz, Jacob Greber, Myriam Robin) ‘Australia’s economy looks to have experienced its weakest start to a year since 2011 – narrowly skirting a contraction – as a growing consumer spending strike and a cyclone-driven slowdown in exports weighs on activity just as the government bets its … Continue reading

24 May 2017 (AFR) – Slump coming for housing construction in Sydney, Melbourne

(24 May 2017, AFR, p37, by Nick Lenaghan) ‘Housing construction in Sydney and Melbourne is headed for a major slump, hit by apartment oversupply and credit tightening, according to industry analysts Macromonitor. The downturn is already underway at a national level, with Macromonitor forecasting a total decline in dwelling starts of 23 per cent from … Continue reading

18 May 2017 (TheAge) – Turnbull government hit with triple blow of bad economic news

(18 May 2017, The Age, p4, Eryk Bagshaw, James Massola) ‘In a triple blow to the Turnbull government, a global ratings agency has cast doubt on the promised return to surplus, consumer confidence has fallen and wage growth has stalled at an all-time low.’ <snipped…> ‘On Wednesday, ratings agency Standard and Poor’s confirmed Australia’s AAA … Continue reading

10 May 2017 (AFR) – Retail ‘verges on recession’ – Weaker retail sales point to household stress

(10 May 2017, AFR, p1,  by: Mark Mulligan, Sue Mitchell ) ‘Economists fear the $300 billion retail sector may be on the verge of recession after sales dipped again in March, confirming feedback from retailers that consumers have cut spending as living costs rise. Retail sales slipped 0.1 per cent in March, falling well short of … Continue reading

4 May 2017 (AFR) – Citi sees house prices falling as much as 7pc as housing boom unwinds

(4 May 2017, AFR, p41, by Nick Lenaghan) ‘House prices could fall as much as 7 per cent by 2018 as lending curbs bite and household debt is lowered, according to Citi. Hardest hit potentially would be apartments in inner-city Brisbane and Melbourne, which are more threatened by oversupply than other housing sectors. The forecast … Continue reading

4 May 2017 (AFR) – Double whammy: Engineering, housing construction slumps to coincide, ACIF says

(4 May 2017, AFR, p37, by Michael Bleby) ‘Australia’s construction industry is likely to shed 166,000 jobs over the next three years as a worse-than-expected deterioration in engineering construction coincides with a slump in residential construction, the latest forecasts from the peak Australian Construction Industry Forum body show.’ Read more at AFR.com (might need AFR … Continue reading

11 Apr 2017 (AFR) – Soft landing for Sydney, Melbourne – House prices to plateau by 2020: CoreLogic

(11 April 2017, AFR, p3, by Su-Lin Tan) ‘Sydney and Melbourne house prices will fall marginally between 2018 and 2020 before stagnating, while Perth’s housing market will recover from 2017, the CoreLogic-Moody’s Analytics Australian Home Value Index Forecast forecasts. The new econometric forecast which started in 2016 and projects home values across the country over … Continue reading

3 Apr 2017 (AFR) – Hong Kong Monetary Authority warns on home loan risks as prices soar

(3 April 2017, AFR, p11, by Sandra Tsui) ‘The Hong Kong Monetary Authority has warned banks in the city over the rising risks of property lending. The warning, reported in the Oriental Daily, comes just as home prices notch up another record in Hong Kong, the world’s most expensive housing market, and Citigroup forecasts an … Continue reading

8 Feb 2017 (AFR) – Economists deeply divided over Australia’s economic path in 2017

[COMMENT: Okay, so who will be right with this crystal-ball gazing?] (8 February 2017, AFR, p6, by Jens Meyer) ‘At the start of the year economists seem more divided than ever over Australia’s growth outlook. Will 2017 be a year of economic stagnation warranting more Reserve Bank of Australia rate cuts or will growth pick … Continue reading

8 Feb 2017 (AFR) – RBA’s Lowe shakes off 2016 gloom – RBA gets bullish on economy

(8 February 2017, AFR, p1, by Jacob Greber) ‘The Reserve Bank of Australia has delivered a markedly more positive outlook for the global and domestic economies, saying this is likely to put upward pressure on inflation and raising the prospect of the first official rate hike since 2010 later this year. Buoyed by…’ Read more … Continue reading

7 Feb 2017 (AFR) – Is the party over for resources and mining stocks?

(7 February 2017, AFR, p16, by Peter Ker) ‘The party has been raging for a year now, but there are signs the resources rally might be coming to an end. Shares in Rio Tinto, BHP Billiton, Fortescue Metals Group, South32, Whitehaven Coal and several others have roared back to multi-year highs in recent weeks, but it’s … Continue reading

1 Feb 2017 (AFR) – Citi forecasts best year for earnings growth since GFC

(1 February 2017, AFR, p27, by Myriam Robin) ‘The upcoming earnings season is forecast to be the most positive since the global financial crisis but growth is expected to be skewed towards the resources sector. Analysts have forecast strong earnings growth, with Citi the latest to offer earnings estimates. The bank’s head of equity strategy, Tony … Continue reading

30 Jan 2017 (AFR) – Trumponomics: Wall Street or academic economists will be wrong

(30 January 2017, AFR, p22, by John Kehoe) ‘One group of pundits is going to be horribly wrong on Trumponomics. Either bullish investors driving stocks to record highs, or many of America’s eminent academic economists who are overwhelming bearish on Trump’s policies will have egg on their face when the history books are written. Justin … Continue reading

25 Jan 2017 (AFR) – ‘Earnings bonanza’ to fuel strong growth for Australian shares in 2017

(25 January 2017, AFR, p27, by Myriam Robin) ‘The Australian sharemarket is forecast to rise this year at its fastest pace since 2013, boosted by a recovery in Australian company earnings. Bank of America Merrill Lynch expects the S&P/ASX200 index to reach 6100 by the end of 2017, a rise of around 9 per cent … Continue reading

18 Jan 2017 (AFR) – Home loan rates heading higher as funding costs rise, competition eases

(18 January 2017, AFR, p13, by Jonathan Shapiro) ‘Mortgage rates are set to rise for both fixed and variable rate borrowers this year as global interest rates shoot higher, competition eases and capital rules begin to bite. “Borrowers should assume we are at the bottom of the interest rate cycle – in fact we are … Continue reading

17 Jan 2017 (AFR) – Fund tips new dawn for consumer stocks – Consumer staples stocks attractive as deflationary forces abate

(17 January 2017, AFR, p16, by Jonathan Shapiro) ‘Reece Birtles of $10 billion Australian equities manager Legg Mason Martin Currie says we’re about to enter a “great environment” for consumer stocks as deflationary forces abate and corporate profit margins expand. Stocks like  <snipped…>  stand to benefit from expanding profit margins as prices rise while costs … Continue reading

16 Jan 2017 (AFR) – Apartments and milk powder a bad bet in 2017, says IBISWorld

(16 January 2017, AFR, p6, by Su-Lin Tan) ‘Looking to start a business in 2017? Stay away from apartment development and milk powder manufacturing. According to research from IBISWorld, these industries, as well as mineral exploration, heavy industry and other non-building construction and grain growing, will suffer a decline in earnings this year. Apartment development, … Continue reading

12 Jan 2017 (AFR) – The key market thresholds every investor should watch in 2017

(12 January 2017, AFR, p25, by Jessica Sier) ‘Investors attempting to comb through a deluge of market predictions for 2017 may be struggling to make sense of the hundreds of pages of investment advice offered up by managers. It’s the time of year when investors are often keen to set out a plan for the … Continue reading

7 Jan 2017 (AFR) – ASX: great year ahead says maverick Richard Coppleson

(7 January 2017, AFR, p26, by Philip Baker) ‘If Richard Coppleson – author of the closely followed Coppo Report – is right, then investors should buy shares in: <snipped…>.  They are some of his top picks for 2017. It’s set to be a good year for the sharemarket, says Bell Potter’s veteran stockbroker, with the major S&P ASX 200 … Continue reading

7 Jan 2017 (AFR) – Buckle up for post-Trump bumpy ride through 2017 – Bridgewater Associates’ Ray Dalio touts Donald Trump’s business savvy team

(7 January 2017, AFR, p23, by Patrick Commins) ‘The mantra for investors this year – no more business as usual. The most hated bull market of all time, the one that investors have felt compelled to pinch their noses and buy into for lack of alternative, is finally getting some love. The market psychology turned … Continue reading

3 Jan 2017 (AFR) – The bear investors of 2016 who got it wrong – A bevy of high-profile investors notch up losses as markets soar

(3 January 2017, AFR, p27, by Karen Maley) ‘Close to a year ago, Crispin Odey, the high-profile British hedge fund manager who profited by correctly predicting the 2008 financial crisis, grabbed headlines around the world with his bleak warning that the global economy was poised for a slowdown that would “devastate” share markets.’ Read more … Continue reading