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2.Economic forecasts

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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) Advertisements

11 Oct 2018 (AFR) – Expectations on house prices and commercial real estate sliding fast

(11 October 2018, AFR, p38, by Matthew Cranston) ‘Expectations on the availability of credit for buying property are the worst they have been since 2011 with more than twice the number of Australia’s property industry professionals expecting interest rates to rise and house prices as well as shopping centre values to fall over the next … Continue reading

11 Oct 2018 (AFR) – IMF sounds warning on economic risks of household debt and high house prices

(11 October 2018, AFR, p9, by John Kehoe) ‘The International Monetary Fund has ramped up concerns on risks to Australia’s economy from bulging household debt and high house prices, as it warned global asset valuations could “adjust abruptly” due to further US interest rate rises. The IMF’s biannual global financial stability report said international financial … Continue reading

10 Oct 2018 (AFR) – Trade war ‘negative’ for Australia, world economic growth to ‘plateau’: IMF

(10 October 2018, AFR, p6, by John Kehoe) ‘Australia’s strong economic growth is tipped to peak at a six-year high of 3.2 per cent in 2018 before the US-China trade war slows the export-dependent local economy next year, according to the International Monetary Fund’s latest world economic outlook (WEO). The IMF forecasts the world economic … Continue reading

5 Oct 2018 (AFR) – Companies are furiously guiding down Wall Street’s estimates

(5 October 2018, AFR, p29, by Lu Wang) ‘On the bull market villains list, it’s public enemy No. 1: peak earnings. At what point does the profit bubble pop? Ever since Caterpillar mentioned a “high water mark” in growth, Wall Street has been on alert. To date, the worries have been unfounded. Earnings soared 24 … Continue reading

4 Oct 2018 (AFR) – Manhattan home sales fall for fourth quarter in a row as listings clog market

(4 October 2018, AFR, p42, by Oshrat Carmiel) ‘It’s been a rough year for Manhattan’s home sellers, and they’re not about to catch a break any time soon. In the three months through September, purchases dropped 11 per cent from a year earlier to 2987 – the fourth straight quarter with a decline, according to … Continue reading

1 Oct 2018 (AFR) – Economists brighten up but house prices, wages cloud outlook – Wary of spending fall, scale back rate expectations

(1 October 2018, AFR, p1, by: Sarah Turner, William McInnes) ‘Market economists focused on the risk consumers may pare back spending, which the royal commission may make worse through a tightening of credit, have scaled back rate interest rate expectations even as they grow more optimistic about the immediate economic outlook. According to The Australian … Continue reading

28 Sept 2018 (TheAge) – Three reasons why wages are mounting a comeback

(28 September 2018, The Age, p3, By Eryk Bagshaw) ‘Australia’s low-wage purgatory appears to be coming to an end after years of torpid growth squeezed household budgets and frustrated politicians attempting to sell the country’s economic growth story to voters. Three recent sets of figures show the composition of pay-packets is changing as higher-paying industries … Continue reading

27 Sept 2018 (AFR) – Coffers hit if Dragon coughs – Budget a ‘sea of red’ if China stumbles

(27 September 2018, AFR, p4, by John Kehoe) ‘The federal government’s revenue surge and push towards a budget surplus is extremely reliant on China continuing to deftly manage its slowing economy and risky financial system. The biggest annual increase in tax collections – 1.1 per cent of GDP or $39 billion – since the goods … Continue reading

26 Sept 2018 (AFR) – Four late cycle signs put Boston fund giant on alert

(26 September 2018, AFR, p29, by Jonathan Shapiro) ‘In his four-decade career as a fund manager, James Swanson says he has learnt that the most important thing is to “know where you are in the business cycle”.   Right now, the strategist at $US450 billion ($620 billion) Boston-based mutual fund MFS Investment Management says the evidence … Continue reading

26 Sept 2018 (AFR) – Government’s FY18 budget position is due to one-off factors, say economists

(26 September 2018, AFR, p4, by Patrick Commins) ‘The rapid and unexpected improvement in the federal government’s budget position since May is down to one-off factors that are unlikely to be repeated over the coming months, economists said. Tuesday’s final budget outcome for the 2017-18 financial year showed the underlying cash deficit shrinking to $10.1 … Continue reading

19 Sept 2018 (AFR) – The ASX sectors that are set for the biggest growth, in charts

(19 September 2018, AFR, p24, by Elio D’Amato) ‘The dust has settled after the reporting season, with most pundits saying it was a winner. Seasoned investors will know, however, that being flippant is not the way to establish a view as to whether the recent run in the market is sustainable.’ <snipped…> ‘Most investors focused … Continue reading

10 Sept 2018 (AFR) – Savings ratio returning to negative territory is a bad sign for the economy – Sting-in-the-tail is the lack of wages growth and impact on savings rate

(10 September 2018, AFR, p23, by Stephen Halmarick) ‘Australia’s national accounts showed economic growth in the second quarter at a stronger-than-expected 0.9 per cent, taking the annual growth rate up to an impressive 3.4 per cent – the strongest since 2012. This data highlights that the growth pessimists have, once again, been proven wrong and … Continue reading

5 Sept 2018 (AFR) – Bond yield spreads ‘show equities are near the peak’

(5 September 2018, AFR, p29, by Andrew McAuley) ‘It is a generally accepted maxim among professional investors that fixed-income managers are better at picking market turning points than equity-only investors. While equity managers concentrate on bottom-up company considerations, bond managers have a sharp focus on broad economic data.’ <snipped…> ‘The yield curve and credit spread … Continue reading

5 Sept 2018 (AFR) – Global debt soars, along with fears of crisis ahead

(5 September 2018, AFR, p23, by David J. Lynch) ‘Ten years after the worst financial panic since the 1930s, growing debt burdens in key developing economies are fuelling fears of a new crisis that could spread far beyond the disruption sweeping Turkey. The loss of investor confidence in the Turkish lira, which has surrendered more … Continue reading

4 Sept 2018 (AFR) – Schroders says the worst may have passed for Indonesia’s markets

(4 September 2018, AFR, p26, by Harry Suhartono) ‘The worst may be over for Indonesia’s markets, according to the country’s biggest mutual fund manager. The rebound in private consumption seen in the second quarter may keep going as the government maintains support to sustain the momentum, says Irwanti, director and portfolio manager at PT Schroder … Continue reading

4 Sept 2018 (AFR) – Argentina to grapple with more austerity – To secure $69.5b IMF help, Argentina may have to reverse farm export tax cuts

(4 September 2018, AFR, p18, by Luc Cohen) ‘Buenos Aires | As Argentina drafts plans to cut its budget deficit to convince nervous investors it can pay its debts, President Mauricio Macri is under increasing pressure to reverse one of his signature policies: cutting farm export taxes. Treasury Minister Nicolas Dujovne promised to announce measures … Continue reading

4 Sept 2018 (AFR) – Australian manufacturing on the cusp of two years uninterrupted growth

(4 September 2018, AFR, p5, by Ronald Mizen) ‘Manufacturing is on the cusp of two years of uninterrupted growth, but energy and commodity prices and the drought are inflating costs, the latest figures from Australian Industry Group show. Ai Group’s performance of manufacturing index climbed 4.7 points to 56.7 in August, indicating an increase in … Continue reading

4 Sept 2018 (AFR) – Earnings outlook trimmed for listed property sector, retail landlords

(4 September 2018, AFR, p41, by Nick Lenaghan) ‘Forward earnings expectations for retail landlords have been marked down most across the listed property sector as the dust settles on earnings season. As well, the forecast overall for the property sector has been revised down by analysts, with a consensus decrease in earnings per share of 1.5 per cent over the coming year. But, … Continue reading

3 Sept 2018 (AFR) – Farm viability remains strong despite the big dry

(3 September 2018, AFR, p5, by Brad Thompson) ‘Rabobank’s latest rural confidence survey shows most farmers reporting relatively strong business viability, despite dry conditions pushing up costs and making it difficult for them to capitalise on high prices for many commodities. However, the survey of about 1000 farmers showed confidence had plunged to its lowest level … Continue reading

3 Sept 2018 (AFR) – After a strong start, GDP forecasts point to slowing as drought bites

  (3 September 2018, AFR, p1, by Vesna Poljak) ‘The Reserve Bank of Australia’s forecasts will be tested this week with the first reading of economic output since the escalation of the drought, which economists say could lower GDP growth just as financial conditions begin to tighten for households. For now Westpac remains the only … Continue reading

31 Aug 2018 (AFR) – Capex numbers point to ‘worrying’ sign investment has peaked

(31 August 2018, AFR, p8, by Patrick Commins) ‘A surprise fall in business investment over the June quarter likely weighed on economic growth, economists say, even as firms upgraded their planned spending for 2018-19. Total spending on buildings and machinery unexpectedly dropped 2.5 per cent in the three months through June, after advancing an upwardly revised … Continue reading

30 Aug 2018 (AFR) – Future Fund cautious on long-term investment outlook

(30 August 2018, AFR, p17, by Jonathan Shapiro) ‘The $146 billion Future Fund says it remains concerned about the long-term outlook for investment markets even though it admitted surprise at the strength of the global economy. “We still believe that prospective returns will remain relatively low,” Future Fund managing director David Neal said in a … Continue reading

30 Aug 2018 (AFR) – Josh Frydenberg assured Sydney, Melbourne property downturn ‘orderly’

(30 August 2018, AFR, p6, by Phillip Coorey ) ‘Treasurer Josh Frydenberg has emerged from briefings with the nation’s key economic regulators satisfied that the slowing of the housing market on the east coast is orderly and that an expected tightening of the labour market could help end flat wages growth.’ Read more at AFR.com … Continue reading

29 Aug 2018 (AFR) – Brace for global recession if trade tensions spread: KPMG

(29 August 2018, AFR, p31, by Sarah Turner) ‘The simmering trade tensions between the United States and China could boil over to a full-blown multilateral trade war and trigger a devastating global recession, KPMG economists are warning. While President Donald Trump’s trade deal with Mexico signed on Tuesday lifted US markets back to records and buoyed investor … Continue reading

23 Aug 2018 (AFR) – Property investors face double blow as prices, yields slide

(23 August 2018, AFR, p40, by Jonathan Shapiro) ‘With property prices in the major cities on the slide, investors may turn to a trusted measure of value to consider their investments – the rental yield. Sluggish rental growth is weakening the income-generating prospects of property, giving buyers another reason to avoid the asset class and … Continue reading

22 Aug 2018 (AFR) – Market minds: Hold the chanpagne – The bond market’s new pessimism

(22 August 2018, AFR, p32, by Steve Miller) ‘I’m a bond guy, and as a paid-up member of the bond managers’ union (BMU), I must acknowledge that bond managers have a reputation for pessimism. Some of our more cynical colleagues in the equity market accuse us of a certain self-interested pessimism – crying “recession” or … Continue reading

22 Aug 2018 (AFR) – Why South Korea risks following Japan into economic stagnation

(22 August 2018, AFR, p27, by Bryan Harris) ‘ Seoul | In the corridors of power in Seoul, among the policymakers, economists and business people who drive Asia’s fourth-largest economy, conversation is dominated by one unlikely topic: crisis. From the outside this may seem odd, given the South Korean economy appears in robust shape. Growth … Continue reading

22 Aug 2018 (AFR) – China’s statistics chief defends data quality as doubts linger

(22 August 2018, AFR, p31, by Bloomberg News) ‘China’s problems with dodgy data are all in the past, according to the man in charge of government statistics. China’s growth this year will probably exceed its annual target of about 6.5 per cent, Ning Jizhe, the head of the National Bureau of Statistics, said in an … Continue reading

21 Aug 2018 (AFR) – Expensive stocks are only getting more expensive, GS says

(21 August 2018, AFR, p33, by: Vesna Poljak, Sarah Turner) ‘The annual reporting season has been a highly successful one for the market’s most expensive stocks, which are being elevated to even higher multiples on results that are just OK. Goldman Sachs equity strategist Matthew Ross finds that with 37 per cent of the market … Continue reading

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