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16 Feb 2018 (AFR) – The end of the artificial market cycle spells trouble ahead

(16 February 2018, AFR, p39, by Elmer Funke Kupper) ‘The fall in equity markets over the last week has created much debate. Most of it is in line with “end of cycle” thinking – it is a modest correction, markets are adjusting to rising interest rates and inflation. But don’t worry, the underlying economic fundamentals … Continue reading

16 Feb 2018 (AFR) – Whatever happened to the Tea Party and its fiscal prudence?

(16 February 2018, AFR, p29, by Edward Luce) ‘The Tea Party is dead. Donald Trump just staged the funeral rites.’ <snipped…> ‘In contrast, Mr Trump stands for nothing but red ink. He inherited a US fiscal deficit of $US587bn in 2016. By next year it will have doubled to $US1.2tn — or more than 5 … Continue reading

16 Feb 2018 (AFR) – US inflation surprises to upside, pointing to faster pace of rate hikes

(16 February 2018, AFR, p15, by John Kehoe) ‘Stronger than anticipated US inflation in January raised investor bets of multiple Federal Reserve interest rates rises this year and cascaded through global financial markets overnight. The annual consumer price index held steady at 2.1 per cent last month and the closely watched underlying CPI – which excludes … Continue reading

16 Feb 2018 (TheAge) – Jobs rise again, marking longest run of gains on record – Unemployment rate at 5.5pc in January

(16 February 2018, The Age, Business, p27, Reuters) ‘Employment notched up the longest streak of gains on record in January, while unemployment fell a tick and female participation in the workforce climbed to a record high. Thursday’s figures from the Australian Bureau of Statistics showed 16,000 net new jobs were added in January, in line … Continue reading

15 Feb 2018 (AFR) – New residential land in short supply: CoreLogic, HIA

(15 February 2018, AFR, p35, by Su-Lin Tan) ‘Vacant land sales fell over the September 2017 quarter, pointing to a steep reduction in available new residential land, the latest Residential Land Report from the Housing Industry Association and CoreLogic says.’ Read more at AFR.com (might need AFR login access, or try: AFR.com/trial)

15 Feb 2018 (AFR) – Commercial construction to jump 14.6pc as retail leads, Master Builders says

(15 February 2018, AFR, p35, by Michael Bleby) ‘Commercial construction will surge this year on the back of new retail work, offsetting the weak residential and engineering sectors and halting a three-year decline in total building activity. Non-residential work supporting the arrival of new retail entrants such as Amazon and the expansion of operators Costco … Continue reading

15 Feb 2018 (AFR) – Sydney’s Zetland, Epping, Schofields at risk of oversupply from new units: Riskwise

(15 February 2018, AFR, p34, by Michael Bleby) ‘Sydney suburbs including Zetland, Epping and Schofields line up with Brisbane, Melbourne’s Southbank and the Perth and Adelaide CBDs in posing the greatest risk to investors from the supply of newly completed apartments, consultancy RiskWise says.’ Read more at AFR.com (might need AFR login access, or try: … Continue reading

15 Feb 2018 (AFR) – ‘Everything looks expensive’: Morningstar’s Daniel Needham

(15 February 2018, AFR, p29, by Sally Patten) ‘Some investors might be dipping their toes back into the sharemarket after last week’s rout, but Morningstar isn’t one of them. The high-profile manager is sitting on a hefty pile of cash and has not begun to deploy any of it, despite the recent falls. “Valuations are … Continue reading

15 Feb 2018 (AFR,FT) – A bit of fear is good for markets

(15 February 2018, AFR, p27, Martin Wolf, Financial Times) ‘The only thing to fear is the lack of fear itself. Benjamin Graham, the guru on investment often cited by Warren Buffett, referred to Mr Market, a personage characterised by wild mood swings. His moments of euphoria may be more enjoyable than those of despair. But … Continue reading

15 Feb 2018 (AFR) – China’s most powerful weapon in Trump trade war may backfire

(15 February 2018, AFR, p12, by Peter Martin, Niu Shuping and Alan Bjerga) ‘As tensions escalate between the US and China, one crop is emerging as the most powerful weapon in a potential trade war: the soybean. China is the biggest buyer of American soybeans, picking up about a third of the entire US crop, … Continue reading

15 Feb 2018 (AFR) – Rabobank warns farmers that Black Sea wheat will keep flowing

(15 February 2018, AFR, p10, by Brad Thompson) ‘Rabobank has warned the Australian wheat industry there is no end in sight to erosion in market share in South-East Asia after a plunge in exports to start the year. The global agribusiness specialist said Canada and the United States were also exposed to the new world … Continue reading

15 Feb 2018 (AFR) – Tony Abbott’s 1 million jobs target is in reach

(15 February 2018, AFR, p9, by Jacob Greber) ‘To the consternation of naysayers, it looks like Tony Abbott was right. The first five years of a Coalition government will deliver one million new jobs. Thursday’s official labour force data for January will take the number of jobs created since September 2013 to 971,535, according to economists’ … Continue reading

14 Feb 2018 (AFR) – Confident start to 2018 – Business upswing gathers steam as RBA maintains wages faith

(14 February 2018, AFR, p1, by Jacob Greber) ‘An intensifying multi-year infrastructure construction boom is cementing the best business conditions on record, leaving some of the nation’s biggest companies struggling to keep up with a surge in demand that has buoyed Reserve Bank of Australia confidence in a wages rebound. As Boral chief executive Mike … Continue reading

14 Feb 2018 (AFR,TheAge) – The Aussie funds hardest hit by the correction

(14 February 2018, AFR, by Patrick Commins) ‘Geared and trend-following managed funds lost as much as 15 per cent during this month’s sharp market correction, highlighting the potential risks of such strategies during bursts of intense volatility. At the same time, cash and fixed-income funds showed their resilience by recording a positive month to date, … Continue reading

14 Feb 2018 (AFR) – Interest-only property investor cash flow crunch sparks fears of fire sales

(14 February 2018, AFR, p36, by Duncan Hughes) ‘Interest-only property investors seeking to switch their loan to principal and interest may be forced to sell because of lenders’  tough new serviceability requirements. A typical borrower paying 4.5 per cent on a $400,000 loan will have to prove to their lender they can meet repayments for a 7.25 per … Continue reading

14 Feb 2018 (AFR) – Market turmoil: US shares have further to fall

(14 February 2018, AFR, p27, by Michael McCarthy) ‘The action in United States markets over the past two weeks has many investors concerned about a crash. Fearful memories of 2008 are flooding back. The exuberance that drove US indices 10 per cent higher in January has melted along with bond markets. Two important questions confront … Continue reading

14 Feb 2018 (AFR) – Small business confidence growing but wary of pitfalls

(14 February 2018, AFR, Special Report p1, by Mark Eggleton) ‘This content is produced by The Australian Financial Review in commercial partnership with Westpac. ‘ ‘Australia’s small business sector is bullish about its prospects for 2018 according to the most recent Westpac-Melbourne Institute SME Index (December 2017) with strong sales and profitability driving the current wave … Continue reading

14 Feb 2018 (AFR) – Boral reports ‘strong’ first half on infrastructure boom

(14 February 2018, AFR, p15, by Simon Evans) ‘Boral chief executive Mike Kane says the building products group is “stretched” meeting demand for soaring demand for concrete and asphalt in NSW. The infrastructure boom already under way in Australia and the first full contribution from Boral’s $US2.6 billion Headwaters acquisition in the United States underpinned a 13 per cent rise … Continue reading

14 Feb 2018 (AFR) – Queensland mining towns bouncing back – reaping the benefits of coal price surge

(14 February 2018, AFR, p7, by Mark Ludlow) ‘Moranbah – the mining town in Central Queensland at the heart of the last mining boom – is making a comeback. While southern investors lost a truckload of money in the town when the bottom fell out of the property market after the end of the boom, … Continue reading

13 Feb 2018 (AFR) – Markets correction: from overdue to overdone? JPMorgan: ‘It’s not the end of the bull market’

(13 February 2018, AFR, p33, by Patrick Commins) ‘Has the correction moved from overdue to oversold? Sentiment has turned from euphoria to something considerably darker in the blink of an eye over the past 10 days. Wall Street’s S&P 500 index suffered its fastest 10 per cent correction since 1950, speaking to the viciousness of … Continue reading

13 Feb 2018 (AFR) – Bond market vigilantes smell blood as US budget deficit blows out

(13 February 2018, AFR, p13, by John Kehoe) ‘The bond vigilantes sniff inflation, so tranquility in global financial markets has given way to turbulence.’ <snipped…> ‘Indeed, the recent global equity sell-off has been driven by a sharp jump in US Treasury yields, largely in reaction to stronger US wage growth and higher inflation expectations. The … Continue reading

12 Feb 2018 (AFR) – Stock market nose dive: ‘This is how QE ends’ – AXA Framlington’s Mark Tinker sees structured product rethink after VIX blow-ups

(12 February 2018, AFR, p13, by Sarah Turner) ‘AXA Framlington’s Mark Tinker says he wasn’t surprised by the role that shorting volatility played in the last week’s stock market rout as he took aim at the wave of structured financial products that have emerged since the global financial crisis. The $US2 billion VelocityShares Daily Inverse … Continue reading

12 Feb 2018 (AFR) – Sydney and Melbourne property steady, NSW first-home buyers pick up

(12 February 2018, AFR, p8, by Su-Lin Tan) ‘Sydney and Melbourne auction clearance rates remain lower than last year’s figures as auctions pick up for the year while first-home buyers pick up in NSW. Sydney had a preliminary clearance rate of 68.7 per cent, rising from 57.1 per cent last week, but still below the … Continue reading

12 Feb 2018 (TheAge) – ‘We knew something was coming’: The day markets rediscovered fear

(12 February 2018, The  Age, Business, p24, By Tom Rees and Tim Wallace) ‘ “We knew something was coming,” recalls a city trader about a tetchy dealing room in London hours before the Dow Jones suffered its biggest one-day points fall in history. “There was an eerie feeling to trading, it felt very wobbly.” “There … Continue reading

10 Feb 2018 (AFR) – Bond traders prepare for central bank paradigm shift

(10 February 2018, AFR, p22, by Jonathan Shapiro) ‘A paradigm shift in central bank policy is the key long term risk to global bond markets, after the fallout from a spike in interest rates spread to global stock markets this week. “We are in a world where institutional stability cannot be taken for granted,” AMP head … Continue reading

10 Feb 2018 (AFR) – China’s HNA in $US4 Billion sell-off

(10 February 2018, AFR, p12, by Sarah Mulholland) ‘The troubled Chinese conglomerate HNA Group  is selling a raft of buildings across the US as the once-voracious acquirer looks to cut its massive debt. Among the properties on the block is 245 Park Avenue in New York, according to a marketing document seen by Bloomberg. HNA bought … Continue reading

10 Feb 2018 (AFR) – Ultimate luxury status symbols of the road and sea defy retail slump

(10 February 2018, AFR, p6, by Duncan Hughes) ‘Nico Tatasciore, the nation’s top Maserati salesman, knows accelerating sales of the luxury Italian sports car are closely linked to the fortunes of the nation’s property markets. But so far the shopping slump that is driving down sales and profits of major retailers like Myer is not slowing … Continue reading

10 Feb 2018 (AFR) – Property slump could push the economy into recession, top economists warn

(10 February 2018,  AFR, p6, by Duncan Hughes) ‘Falling property prices in Sydney and Melbourne could cause the nation’s wealthiest consumers to cut back sharply on spending and drive the economy into recession, according to leading economists. Belt tightening by the biggest spenders and most highly geared property investors could have the “unintended consequence” of … Continue reading

10 Feb 2018 (AFR) – Labour market tightening to pre-GFC levels – Record labour shortages point way to focus on wage growth

(10 February 2018, AFR, p4, by David Marin-Guzman) ‘Labour shortages are the highest they have been since the global financial crisis, raising expectations of future wage growth, according to the latest National Australia Bank business survey. The survey, which is seen as a leading indicator of the unemployment rate, revealed a sharp increase in labour … Continue reading

10 Feb 2018 (AFR) – Little sign of end to global sharemarket turmoil

(10 February 2018, AFR, p1, by Patrick Commins) ‘Investors went into the weekend with few signs of an end to the volatility which has convulsed global markets in recent days as Australian shares suffered their worst weekly fall in two years.  Following a mid-week hiatus, a renewed pulse of selling in global markets dragged the … Continue reading

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