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2.Economic forecasts

This category contains 428 posts

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

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

6 Dec 2018 (AFR) – ASX back to 6000 in 2019: Morgan Stanley

[COMMENT – I am always amused by those who proffer forecasts such as this – that the Top 200 index will be at 6000 in a years time. How can this be anything but sheer ‘educated’ guess work?] (6 December 2018, AFR, p28, By Tim Boyd) ‘Morgan Stanley strategists have set their 12-month price target … Continue reading

6 Dec 2018 (AFR) – Josh Frydenberg: GDP figures don’t show real strength of economy

(6 December 2018, AFR, p8, By Josh Fydenberg) ‘The Australian economy continues to perform well. At 5 per cent, the unemployment rate has fallen to a six-year low and over 1.1 million jobs have been created. Earlier this week, the Reserve Bank of Australia noted that business conditions are positive. Consumer confidence is above the … Continue reading

5 Dec 2018 (TheAge) – Food price warning as wheat crop plummets

(5 December 2018, The Age, Business, p27, By Liam Phelan) ‘Severe drought has smashed crop production in Australia’s eastern states, with retail experts warning consumers could soon pay higher prices for food and fashion as a result. NSW was worst hit, with crop production in 2018-19 forecast to fall 57 per cent to about 3.1 … Continue reading

1 Dec 2018 (AFR) – Residential mortgage risks rise as prices fall and defaults lift

(1 December 2018, AFR, p29, by Christopher Joye) ‘One of our best “short” (as opposed to “long”) ideas this year has been to bet that the credit spreads on residential mortgage-backed securities (RMBS) would widen – reducing their price – as a function of the toxic combination of falling house prices, rising defaults, surging supply … Continue reading

29 Nov 2018 (AFR) – Perth house prices will grow faster than all other markets in 2019: Domain Group

(29 November 2018, AFR, p30, by Ingrid Fuary-Wagner) ‘After a free fall in prices over the past four years, house values in Perth are expected to grow faster than any other capital city in 2019, according to real estate group Domain. Perth house prices are expected to hit rock bottom by the beginning of 2019 and then grow 5 per cent … Continue reading

27 Nov 2018 (AFR) – Mortgage delinquencies double as loans convert to principal-interest: Moody’s

(27 November 2018, AFR, p31, by Michael Bleby) ‘Overdue loans will rise as mortgages convert to principal-and-interest from interest-only, driving a “moderate” increase in mortgage delinquencies, Moody’s Investor Service says in a new report. Citing its own figures showing that 0.94 per cent of loans that had converted to principal-and-interest from interest-only were 90 days or … Continue reading

26 Nov 2018 (AFR) – Positioning for a rate hike pause by the Federal Reserve – Investors getting jittery despite profits

(26 November 2018, AFR, p23, by Timothy Moore) ‘US equity investors have begun to position for a pause in the Federal Reserve’s rate hiking cycle and that’s put the bull market in peril. Despite stellar third-quarter profits across corporate America, the lowest unemployment rate in a generation, an economy expanding faster than its potential and … Continue reading

23 Nov 2018 (AFR) – Housing downturn will hurt mall landlords Scentre, Vicinity, GPT: Citi

(23 November 2018, AFR, p35, by Nick Lenaghan) ‘The ongoing residential downturn will hit retail sales growth, creating a “meaningful” downside risk for major mall landlords, including Scentre, Vicinity and GPT, according to Citi. Housing downturns drive a slowdown in retail sales growth. The Citi team measured the extent of that impact after identifying 24 state-specific housing downturns … Continue reading

23 Nov 2018 (AFR) – ANZ doubles down on housing downturn: prices to fall 20pc

(23 November 2018, AFR, p35, by Nick Lenaghan) ‘Housing prices could fall as much as 20 per cent across Sydney and Melbourne before the downturn is over, according to a revised forecast from ANZ. ANZ’s economists are the latest to downgrade their predictions amid worsening signals from the housing market and the chilling effect of credit tightening.’ … Continue reading

23 Nov 2018 (AFR) – OECD tips ‘robust’ Australian economic growth

(23 November 2018, AFR, p3, by John Kehoe) ‘Australia’s economic growth is tipped to remain “robust” and ahead of most advanced economies through to the end of next year, despite global growth tempering and escalating financial risks emanating from the United States, the Organisation for Economic Co-operation and Development says. “New capacity coming on stream … Continue reading

22 Nov 2018 (AFR) – Risks rise for investors as developed economies falter

(22 November 2018, AFR, p22, by Mohamed El-Erian) ‘Life would be better for equity investors if the transition from quantitative easing and ultra-low interest rates was unfolding against a backdrop of solid economic growth. Instead, the global economy is losing momentum and the divergence between advanced economies is growing. As a result, financial market choppiness … Continue reading

16 Nov 2018 (AFR) – People’s Choice Credit Union rejects house price collapse fear mongering

(16 November 2018, AFR, p6, by Simon Evans) ‘Australia’s third largest credit union has tightened its lending criteria for home loan customers and is placing heavier scrutiny on household expenses and spending patterns when assessing borrowers, but has a more optimistic outlook on Australian house prices than many economists. Steven Laidlaw, chief executive of People’s … Continue reading

16 Nov 2018 (AFR) – Unemployment rate steady at 5pc in October

(16 November 2018, AFR, p3, by Sarah Turner) ‘The Australian economy added 32,800 jobs in October, maintaining the unemployment rate at 5 per cent, and presenting further evidence that the labour market is getting tighter after fresh data this week showed wages advanced the most in three years. Figures released by the Australian Bureau of … Continue reading

15 Nov 2018 (AFR) – Big city house prices may fall 30pc from peak – Sydney and Melbourne prices could fall as much as 30pc from peak prices

(15 November 2018, AFR, p33, by Su-Lin Tan) ‘By the end of 2019, Sydney and Melbourne house prices may fall by 12 to 17 per cent from peak prices and could trigger a recession, SQM Research’s annual Christopher’s Housing Boom and Bust Report says. If negative gearing is repealed, then the fall from peak prices could … Continue reading

8 Nov 2018 (AFR) – Budget closer to surplus on RBA economic upgrade

(8 November 2018, AFR, p2, by John Kehoe) ‘The federal budget will be about $5 billion a year better off and moving faster to surplus if Treasury adopts similarly bullish forecasts to the Reserve Bank of Australia’s more rosy outlook for the economy. The RBA on Tuesday said economic growth was forecast to average about … Continue reading

7 Nov 2018 (AFR) – What economists predict for Australian house prices in 2019

[COMMENT: Here are some economist forecasts for house prices in the year ahead. But note the reported comment that a year ago they got it way wrong for 2018. So, is this of any use at all for retail investors and home owners?] (7 November 2018, AFR, p35, by Ingrid Fuary-Wagner) ‘As property values fall … Continue reading

3 Nov 2018 (AFR) – Falling property prices to hit economy – could ruin Christmas for retailers

(3 November 2018, AFR, p4,  Duncan Hughes) ‘The fall in the property market risks affecting consumer demand on the eve of Christmas sales, traditionally the peak sales period for retailers, according to analysis by investment bank Morgan Stanley.’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

3 Nov 2018 (AFR) – Softer retail sales a red flag for consumer health, economy

(3 November 2018, AFR, p1, by Sarah Turner) ‘Rising prices for petrol and food are eating into household budgets threatening to further weigh on consumer spending and drag down economic growth that has only just picked up after years in the doldrums. Retail spending rose just 0.2 per cent on a seasonally-adjusted basis in September, failing … Continue reading

1 Nov 2018 (AFR) – Plunging childcare costs drive inflation lower

(1 November 2018, AFR, p4, by Patrick Commins) ‘A more than 10 per cent fall in childcare costs pushed inflation lower over the September quarter, a boon to households that nonetheless still face relatively rapid increases in prices for essential goods and services. The Australian Bureau of Statistics’ consumer price index lifted 0.4 per cent … Continue reading

31 Oct 2018 (AFR) – Property market weakness will cut spending, GDP: Capital Economics

(31 October 2018, AFR, p34, by Michael Bleby) ‘Australia’s weakening housing market will shave 0.3 percentage points off economic growth over the next three years as consumers pull back spending as their home values decline, Capital Economics says.  The consultancy, which earlier this year widened its prediction from 10 per cent to a 12 per cent decline … Continue reading

29 Oct 2018 (AFR) – Stocks face GFC-level rout, closing in on worst month since the GFC, as Donald Trump’s trade war bites and hits GDP

(29 October 2018, AFR, p11, by Jacob Greber) ‘Washington | Donald Trump’s trade war is disrupting his booming economy, and this has investors jittery as stock markets confront the worst October since the global financial crisis. Friday’s third-quarter US gross domestic product data confirmed the world’s biggest economy cooled from the second quarter, with annualised … Continue reading

19 Oct 2018 (AFR) – AMP Capital cuts housing forecast, predicts 20pc decline in Sydney and Melbourne

(19 October 2018, AFR, p10, by Michael Bleby) ‘AMP Capital has cut its outlook for the housing market to predict a peak-to-trough decline of 20 per cent in Sydney and Melbourne. Persistently low auction clearance rates, along with tighter credit and the prospect of reduced negative gearing and capital gains tax deductions for property investors under … Continue reading

18 Oct 2018 (AFR) – Politics puts the skids under bull market

(18 October 2018, AFR, p31, by Martin Wolf) ‘Bull markets, it is said, climb a wall of worry. When the last worrier turns into a fully invested optimist, the market has nowhere to go but down. That might be what has just happened: so much optimism was already in the prices of financial assets — … Continue reading

18 Oct 2018 (AFR) – Wages to ‘pick up gradually’: RBA

(18 October 2018, AFR, p9, by Patrick Commins) ‘A meaningful pick-up in wage growth looks set to remain elusive as economic growth over the next few years gradually reduces spare capacity in the labour market, deputy Reserve Bank governor Guy Debelle said. The labour market remains in “pretty good shape,” Mr Debelle said in a … Continue reading

16 Oct 2018 (AFR) – Ten reasons why the world economy will crash by 2020

(16 October 2018, AFR, p47, by Nouriel Roubini and Brunello Rosa) ‘As we mark the decennial of the collapse of Lehman Brothers, there are still ongoing debates about the causes and consequences of the financial crisis, and whether the lessons needed to prepare for the next one have been absorbed. But looking ahead, the more … Continue reading

15 Oct 2018 (AFR) – IMF ranks Australian government balance sheet among world’s best

(15 October 2018, AFR, p10, by Jacob Greber) ‘Washington | A new attempt by the International Monetary Fund to comprehensively measure the health of government balance sheets has given Australia one of the world’s top rankings. In a study prepared for last weekend’s Group of 20 finance ministers‘ meeting in Bali, Indonesia, that challenges some … Continue reading

15 Oct 2018 (AFR) – Treasurer Josh Frydenberg warns global ‘headwinds’ require budget restraint

(15 October 2018, AFR, p8, by John Kehoe) ‘Nusa Dua, Bali | Treasurer Josh Frydenberg has warned the US-China trade war and emerging market debt challenges due to rising US interest rates are economic “headwinds”, so Australia must ensure budget discipline approaching the federal election in case of a global financial downturn. In an interview … 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)

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