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2.Economic forecasts

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16 Aug 2018 (AFR) – Detached house growth to offset apartment construction fall this year, HIA says

(16 August 2018, AFR, p40, by Michael Bleby) ‘Detached housing construction likely rose to its highest level in 18 years over the four quarters to June, as demand triggered by the growing  population more than offset a small decline in apartment starts. In its latest forecasts published on Wednesday, the Housing Industry Association said commencements … Continue reading

16 Aug 2018 (AFR) – Citi: ‘severe’ drought could wipe 0.6pc from 2018-19 GDP

(16 August 2018, AFR, p33, by Vesna Poljak) ‘A worsening of drought conditions in Australia could put market forecasts for economic growth at risk warns Citigroup, wiping more than half a percentage point from GDP growth in 2018-19 assuming the economy experiences a 20 per cent fall in farm production. The last time farm GDP … Continue reading

16 Aug 2018 (AFR) – Don’t rush back into emerging markets – Emerging markets need Turkey to deliver a circuit breaker

(16 August 2018, AFR, p31, by Mohamed El-Erian) ‘The temptation for experienced emerging market investors is to respond to the Turkey-induced sell-off by using a game plan that has worked for many years. But before buying baskets of EM bonds and currencies, an important fact needs absorbing: Turkey’s policy response has so far had little … Continue reading

16 Aug 2018 (AFR) – Indonesia fights Turkey contagion with surprise rate hike

(16 August 2018, AFR, p15, by Viriya Singgih and Tassia Sipahutar) ‘Jakarta | Indonesia’s central bank surprised most economists by raising its benchmark interest rate a fourth time since May, moving swiftly to contain the volatility sweeping across emerging markets and curb a slide in its currency. The seven-day reverse repurchase rate was raised to … Continue reading

14 Aug 2018 (AFR) – Turkey the latest victim of ‘rolling bear market’

(14 August 2018, AFR, p28, by Patrick Commins) ‘Anybody with a vague interest in global economic affairs has known for years that Turkey was a country headed for trouble.’ <snipped…> ‘Economists now expect a recession in Turkey and fret over the possibility of a banking crisis. Investors worry the Turks’ troubles will spread across emerging … Continue reading

14 Aug 2018 (AFR,Reuters) – Singapore revises second-quarter GDP growth lower, flags risks from trade

(14 August 2018, AFR, p26, Reuters) ‘SINGAPORE (Reuters) – Singapore’s economy grew slower than initial estimates in the April-June period on a quarter-on-quarter basis, revised data showed on Monday, as the government flagged a likely moderation in growth in the second half.  The city-state’s Ministry of Trade and Industry (MTI) said retaliatory tariffs between the … Continue reading

3 Aug 2018 (AFR) – Stocks, priced for perfection, are vulnerable to shocks

(3 August 2018, AFR, p29, by John Authers) ‘Whatever else there might be to worry about, US earnings are a source of comfort. This earnings season has picked up very much where the last one left off and was locked into positivity long before Apple’s very strong results this week. At the latest count, according to … Continue reading

2 Aug 2018 (AFR) – Rise in overseas student at top unis boosts demand for beds

(2 August 2018, AFR, p37, by Nick Lenaghan) ‘Australia’s top universities are taking in a greater proportion of full fee-paying international students, a broader trend which is driving demand for student accommodation places, according to an industry report. This year alone 8,290 new purpose-built student accommodation beds will become operational nationally, a rise of 20 … Continue reading

2 Aug 2018 (AFR) – Stakes are high for passive funds after Faang sell-off

(2 August 2018, AFR, p27, by John Plender, Financital Times) ‘If value investors have been on the rack in recent times, their experience has stemmed, at least in part, from inadequate exposure to Faang stocks — the fabled Facebook, Amazon, Apple, Netflix and Google/Alphabet. Since last Thursday’s spectacular $US120 billion fall in Facebook’s market capitalisation … Continue reading

2 Aug 2018 (AFR) – Credit crunch could hit house prices by 20pc: Endeavour

(2 August 2018, AFR, p15, by Jonathan Shapiro) ‘Sydney and Melbourne house prices could fall by 15 to 20 per cent in a repeat of the late 1980s and ’90s, an independent equity research firm has argued, citing the “largest regulatory credit crunch in 30 years” as the cause for the slide in property values. … Continue reading

30 July 2018 (AFR) – US economic data gets Trumped – Strong quarter for US unlikely to be repeated

(30 July 02018, AFR, p20, by Timothy Moore) ‘While Donald Trump says the US economy is going to surge higher, most economists aren’t betting on it. On Friday in Washington, the US government reported the economy expanded at a 4.1 per cent annual rate in the three months ended June, up from a revised 2.2 … Continue reading

30 July 2018 (AFR) – Investors fear ‘Facebook reaction’ to earnings misses

(30 July 2018, AFR, p13, by Patrick Commins) ‘Investors are confident the August profits season kicking off this week will confirm the solid earnings growth trend that has helped the sharemarket reach its highest levels in 10½ years. But they warn slight disappointments for high-flying stocks could be punished by the market.’ <snipped…> ‘A solid … Continue reading

26 July 2018 (AFR) – Funding for developments set to worsen – Commercial property sentiment wanes: NAB survey

(26 July 2018, AFR, p37, by Nick Lenaghan) ‘Sentiment in the commercial property market has fallen as the outlook in the booming hotel sector eased and retail expectations remain negative, according to a quarterly National Australia Bank survey. The index overall – covering the office, retail, industrial and CBD hotel sectors – fell four points … Continue reading

26 July 2018 (AFR) – Inflation keeps RBA’s hands tied – No joy for RBA as inflation disappoints

(26 July 2018, AFR, p1, Patrick Commins, Vesna Poljak) ‘The prospect of a return to more-normal monetary policy settings was pushed further into the future, as inflation growth fell short of expectations for a record seventh consecutive quarter. Data released by the Australian Bureau of Statistics shows consumer price inflation lifted to 2.1 per cent … Continue reading

23 July 2018 (TheAge,SMH) – ‘All downhill’ for US growth, says Capital

(23 July 2018, The Age, Business, p22, Timothy Moore) ‘The US central bank will shift to cutting interest rates as soon as 2020, to counter a slowdown in growth as forecast by Capital Economics. “Our long-held hawkish view that the Fed would be forced to hike interest rates twice in the second half of this … Continue reading

23 July 2018 (AFR) – More builders to fail as housing starts drop 22pc by 2020, BIS says

(23 July 2018, AFR, p32, by Michael Bleby) ‘Housing commencements will fall by almost a quarter over the next few years in the sharpest slump since the global financial crisis hit in 2008, offsetting growth in non-residential construction and pushing more builders over the edge, BIS Oxford Economics says. The decline that will cut total housing … Continue reading

23 July 2018 (AFR) – Brace for slow-motion property crash – ARCO fund manager George Colman is bearish on Australian property

(23 July 2018, AFR, p15, by Sarah Turner) ‘ARCO fund manager George Colman says he is cautious on the Australian economy and is warning of a “slow-motion property market crash”. “Broadly speaking, we think that the game has changed in terms of consumer behaviour,” he says. “Bank credit is creating a step change.” ‘ Read … Continue reading

23 July 2018 (AFR) – ‘Mini-credit crunch’ may accelerate property price falls: Deloitte

(23 July 2018, AFR, p9, by Su-Lin Tan) ‘House price falls in Sydney and Melbourne “will get worse before they get better”, the latest business outlook from Deloitte Access Economics says. The increasingly higher cost and lower availability of credit that are hurting housing markets will generate a “mini-credit crunch”, putting further pressure on house … Continue reading

20 July 2018 (AFR) – Pay attention to the bond market’s message: Lazard

(20 July 2018, AFR, p29, by Jonathan Shapiro) ‘Federal Reserve chairman Jerome Powell may be advising investors not to get caught up in the bearish signals being transmitted by the bond market, but analysts say the predictive powers of the yield curve are too strong to ignore. “We are of the view that the bond … Continue reading

19 July 2018 (AFR) – Global fund managers turning bearish

(19 July 2018, AFR, p26, by Timothy Moore) ‘Global fund managers have turned bearish, significantly lowering expectations for corporate earnings over the next year, according to Bank of America Merrill Lynch. “Investor sentiment is bearish this month, with survey respondents eyeing the risks from a possible trade war,” said Michael Hartnett, BAML’s chief investment strategist. “Equity allocation has fallen … Continue reading

13 July 2018 (AFR) – NAB cuts housing forecasts as sentiment falls to 2-year low: warns on credit

(13 July 2108, AFR, p4, by Michael Bleby) ‘Weaker than expected residential markets in Melbourne, Brisbane and Perth have added to ongoing weakness in Sydney and prompted NAB to cut its outlook for housing prices this year and next.’ Read more (and see another table) at AFR.com (might need AFR login access, or try: AFR.com/trial)

7 July 2018 (AFR) – Trade wars: are investors worried enough?

(7 July 2018, AFR, p29, by Patrick Commins) ‘Anybody claiming President Donald Trump was all talk on trade would have been forced to doff their rose-tinted glasses the moment Trump’s tariffs on $US34 billion of Chinese imports came into effect on Friday afternoon. Markets have been pricing in the ramping risks. Copper – the global bellwether … Continue reading

7 July 2018 (AFR) – ‘The number one risk for 2018 is a brutal correction of stock prices’

(7 July 2018, AFR, p26, by Ambrose Evans-Pritchard) ‘France’s market watchdog is bracing for a surge in global bond yields and a Wall Street crash as soon as this year, fearing that contagion will spread to Europe and snuff out the fragile recovery. “The world has never been so indebted – even more than before … Continue reading

7 July 2018 (AFR) – Central bankers determined not to repeat the financial crisis

(7 July 2018, AFR, p26, by Chanticleer) ‘This week’s warnings of a possible recession and collapse in asset prices in the mid-2020s caused by a snapback from low interest rates shows the world’s central banks are determined to avoid a repeat of the systemic disruption of a decade ago. This time around the central bankers, … Continue reading

3 July 2018 (AFR) – Top economists turn more bearish on property prices

(3 July 2018, AFR, p1, by Sarah Turner) ‘Top economists are turning more bearish on the housing market at the same time as fund managers fear house price declines could trigger a “nasty cycle” in the economy and more downside for the Australian dollar.’ Read more at AFR.com (might need AFR login access, or try: … Continue reading

2 July 2018 (AFR) – Economic forecasts for the year ahead (aka crystal ball)

(2 July 2018, AFR, p20) Economists’ forecasts for key Australian indicators for the year ahead.

2 July 2018 (AFR) – Top equity strategists set out ASX targets for the year ahead

[COMMENT: In my humble opinion, the strategies of the larger fund managers might beokay for them, but perhaps not so for the smaller retail investors. That is, one size does NOT fit all. So this article is interesting reading; but is the content appropriate for retail investors? And the other point to also bear in … Continue reading

2 July 2018 (AFR) – RBA on hold for another year: AFR quarterly economist survey

(2 July 2018, AFR, p1, by: Vesna Poljak, Sarah Turner) ‘Market economists have sharply pushed out the expected timing of the next Reserve Bank interest rate rise, amid warnings that Australia’s central bank is running out of “policy space” to deal with the next economic downturn. A slightly dovish shift in governor Philip Lowe’s latest … Continue reading

25 June 2018 (AFR) – Slowdown in house prices expected to continue until 2021: BIS Oxford Economics

(25 June 2018, AFR, p33, by Su-Lin Tan) ‘The slowdown in house prices is expected to continue until 2021, with Sydney emerging as the capital city with the worst prospects while Brisbane surprises as the city with the most upside, economic forecaster BIS Oxford Economics says. Sydney house prices are about to do a flip … Continue reading

22 June 2018 (AFR) – Housing downturn shallow and short-lived, says CoreLogic and Moody’s

(22 June 2018, AFR, p5, by Mark Mulligan) ‘Australia’s housing slump could prove short-lived, according to a report from CoreLogic and Moody’s, with solid employment growth, loose monetary policy, decelerating supply and easing of some controls on lending helping to lift prices across the country after this year’s shallow dip. CoreLogic-Moody Analytics’ latest Home Value … Continue reading

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