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17 Aug 2019 (AFR) – The bond market and recession: Is this time different?

(17 August 2019, AFR, p25, Vesna Poljak, Markets Editor) ‘The terrifying signal sent by the inversion of the US yield curve cannot be ignored, but neither is it fully understood, even though its strike rate in predicting recessions could be about to extend to eight from eight. There was no recovery in the sharemarket on … Continue reading

16 Aug 2019 (AFR) – ‘Self-fulfilling’ downturn ahead, but Australia insulated: RBA

(16 August 2019, AFR, p5, Matthew Cranston, Economics correspondent) ‘Reserve Bank of Australia deputy governor Guy Debelle has warned of a “self-fulfilling downturn” globally because of the uncertainty over the US and China trade and technology war, but expects Australia will be insulated due to Chinese fiscal stimulus. After the Dow Jones Industrial Average sank … Continue reading

16 Aug 2019 (AFR) – Jobless rate stuck at 5.2pc

(16 August 2019, AFR, p4, Matthew Cranston, Economics correspondent) ‘The economy created 41,100 new jobs last month – outstripping expectations of a gain of 14,000 – but it was not enough to reduce the overall jobless rate from 5.2 per cent, which has been unchanged for the fourth consecutive month.’ Read more at (might … Continue reading

16 Aug 2019 (TheAge) – Top Australian CEOs fear further turmoil amid market rout

(16 August 2019, The Age, Business, p20, By David Scutt and Sarah Keoghan) ‘Top Australian chief executives say they are concerned about further turmoil for the global economy amid the ongoing threat of a trade war between the world’s two superpowers and fresh fears of a recession in the United States. The local sharemarket suffered … Continue reading

13 Aug 2019 (TheAge) – Dairy giant Fonterra unveils $820m write-down as drought is ‘new norm’

(13 August 2019, The Age, Business, p24, By Darren Gray) ‘Dairy giant Fonterra says ongoing drought is the “new norm” in Australia as it unveiled $820 million in write-downs after a lengthy review of its key assets, and forecast a loss of more than half a billion dollars for the 2019 financial year.’ Read more … Continue reading

12 Aug 2019 (TheAge) – We’re edging towards admitting we’re caught in ‘secular stagnation’

(12 August 2019, The Age, Business, p21, Ross Gittins) ‘At least since 2012, Treasury, the Reserve Bank and successive governments have assured us a return to the old normal of strong economic growth, high wages and low unemployment wasn’t far off. But last week big cracks emerged in governor Philip Lowe’s optimistic facade. In all … Continue reading

10 Aug 2019 (AFR) – Low rates are the weeds of the equity market

(10 August 2019, AFR, p23, Vesna Poljak, Markets Editor) ‘The Australian cash rate is inching closer to the zero lower bound, the same sharemarket that hit a record high in July just had its worst week in nine months, and earnings season is off to a rocky start. On what might eventually be recalled as … Continue reading

8 Aug 2019 (AFR) – Construction shrinks at fastest pace in 6 years in July

(8 August 2019, AFR, p31, Michael Bleby, Senior Reporter) ‘Australia’s construction industry is further shrinking, with declining new orders and job losses adding to declining activity in the house- and apartment-building sectors. The headline Performance of Construction Index fell 3.9 points to 39.1 in July, its lowest level in six years, as the leading indicator … Continue reading

7 Aug 2019 (AFR) – Yuan fallout wipes $53b off the ASX

(7 August 2019, AFR, p26, William McInnes, Reporter) ‘The Australian sharemarket saw $53 billion wiped from its boards on Tuesday as a global market sell-off entered its second day, reversing two months worth of gains in the local market. The S&P/ASX 200 Index dropped 162.2 points, or 2.4 per cent, to 6478.1 while the broader … Continue reading

7 Aug 2019 (AFR) – ‘Super massive’ record trade surplus

(7 August 2019, AFR, p1, John Kehoe, Senior Writer) ‘Australia’s monthly trade surplus has smashed its previous record to hit $8.04 billion, putting a current account surplus within reach for the first time since 1975. China’s insatiable appetite for mining commodities underpinned the trade surplus in June, with strong iron ore prices and export volumes … Continue reading

6 Aug 2019 (AFR) – New car sales shift into second gear

(6 August 2019, AFR, p6, Simon Evans, Senior Reporter) ‘New vehicle sales declined for the 16th straight month in July but the boss of the organisation that oversees 1500 car dealers said a tempering of the slowdown was emerging. The national figures from the Federal Chamber of Automotive Industries showed a 2.8 per cent drop … Continue reading

31 July 2019 (AFR) – Building approvals slump to six-year low

(31 July 2019, AFR, p30, Michael Bleby, Senior Reporter) ‘New housing approvals slumped to a six-year low in the year to June as tighter curbs on lending and falling prices hit development activity and prompted economists to warn of risks to the wider economy and jobs from a sector that was likely to keep shrinking. … Continue reading

31 July 2019 (AFR) – Shares reclaim record high after 11-year wait – Profits season to test sharemarket’s record high

(31 July 2019, AFR, Vesna Poljak and William McInnes) ‘Interest rates drove the Australian sharemarket to a fresh record high on Tuesday, completing an 11-and-a-half year journey, but it will take improved corporate earnings to sustain prices at these levels. A 19.3 point, or 0.3 per cent, advance in the S&P/ASX 200 Index enabled the … Continue reading

31 July 2019 (TheAge) – Australian shares hit fresh highs, but risks to the rally remain

(31 July 2019, The Age, Business, p31, By David Scutt) ‘After years of underperforming other major equity markets – most noticeably those in the United States – Australian stocks have finally managed to hit fresh peaks. But it means investors face a difficult question: how long can this rally last? Tribeca Investment Partners portfolio manager … Continue reading

29 July 2019 (AFR) – Separating earnings sentiment from earnings reality

(29 July 2019, AFR, p21, Jun Bei Liu) <snipped…> ‘…With August reporting season now mere days away from commencing, the wave of recent earnings guidance downgrades will be telling. With actual earnings performances now tallied and awaiting release, will there be enough positive surprises to drive continued share price out-performance?’ Read more at (might … Continue reading

13 July 2019 (AFR) – Saver deposit rates crushed below 2pc

(13 July 2019, AFR, p1, Matthew Cranston, Economics correspondent) ‘Savers have never been worse off after interest rates on standard savings accounts were slashed below 2 per cent by ANZ and NAB on Friday, with other banks are likely to follow after the latest Reserve Bank rate cuts. The interest savers can earn will get … Continue reading

12 July 2019 (TheAge) – RBA research shows climbing debt is hitting household spending

(12 July 2019, The Age, p9, By Shane Wright) ‘Australia’s climbing debt levels are hurting the broader economy, with ground breaking research from the Reserve Bank showing a “debt overhang” that is directly hitting households and their ability to spend. In research that could challenge the Morrison government’s hopes for a tax refund-fuelled bounce in … Continue reading

11 July 2019 (AFR) – Consumer confidence tanks despite RBA, tax cuts

(11 July 2019, AFR, p9, Matthew Cranston, Economics correspondent) ‘Consumer confidence has fallen to a two-year low despite two RBA interest rate cuts and the Morrison government’s $158 billion income tax package, the latest Westpac-Melbourne Institute Index shows. Westpac senior economist Matthew Hassan said the 4.1 per cent fall in sentiment to 96.5 in July, … Continue reading

10 July 2019 (AFR) – Wage rises for low paid good news for RBA

(10 July 2019, AFR, p1, Matthew Cranston and David Marin-Guzman) ‘Wage growth appears to be picking up for the low-paid, with banks, retail and fast-food giants promising higher pay increases for most workers in new enterprise agreements. The wage rises covering some of the economy’s biggest employers such as Westpac and McDonald’s have seen increases … Continue reading

5 July 2019 (AFR) – Tax cuts to double the RBA effect

(5 July 2019, AFR, p8, Matthew Cranston, Economics correspondent) ‘The federal government tax cut package delivers $7.5 billion into the pockets of 10 million people in the next few months, equal to another two RBA interest rate cuts. The first stage of the tax package doubles the low and middle-income tax offset, which means an … Continue reading

4 July 2019 (AFR) – Trade surplus hasn’t quieted rate cut talk

(4 July 2019, AFR, p7, Matthew Cranston, Economics correspondent) ‘Monthly iron ore exports busted through the $10 billion mark for the first time ever and building approvals data beat market expectations on Wednesday. But some economists remained cautious that the Reserve Bank could cut interest rates again next month because unemployment might not have improved.’ … Continue reading

3 July 2019 (AFR) – RBA cut hits ASX as bank investors flee

(3 July 2019, AFR, p26, William McInnes, Reporter) ‘Australian shares closed Tuesday’s session only slightly higher as investors fled the major banks over fears their margins would be squeezed after the Reserve Bank of Australia cut the cash rate to a record low 1 per cent. The S&P/ASX 200 Index rose 5.1 points, or 0.1 per … Continue reading

1 July 2019 (AFR) – Commodity exports headed for $285b peak

(1 July 2019, AFR, p6, Peter Ker, Resources reporter) ‘Soaring iron ore and coking coal prices will drive the value of Australian mining and energy exports to a record high over the next year, and the Department of Industry says a trade war between the world’s two biggest economies could provide a perverse boost to … Continue reading

20 June 2019 (AFR) – Rate cuts won’t ease CEOs’ world of worry

(20 June 2019, AFR, p15, Simon Evans, Senior Reporter) ‘The chief executive of Australia’s biggest labour hire company says more interest rate cuts are unlikely to fire up a ”flat” economy because businesses grappling with automation, red tape and globalisation are uncertain about future pay-offs from capital investment.’ Read more at (might need AFR … Continue reading

20 June 2019 (AFR) – Rate cut, election result fail to brighten outlook

(20 June 2019, AFR, p8, Matthew Cranston, Reporter) ‘The federal election result and a historic interest rate cut have not been enough to reverse the negative outlook for the economy, with the Westpac-Melbourne Institute Leading Index forecasting below-trend growth over the next three to nine months. The index incorporates measures including sharemarket movements, consumer sentiment, … Continue reading

19 June 2019 (TheAge) – RBA rate cut prospects drive ASX gains

(19 June 2019, The Age, Business, p29, By Luke Housego) ‘Rising expectations of further interest rate cuts drove Australian shares higher on Tuesday, as the Reserve Bank’s minutes from its June meeting revealed the possibility of two rate cuts before the end of the year. The benchmark S&P/ASX 200 advanced 39.1 points, or 0.6 per cent, … Continue reading

19 June 2019 (TheAge) – More rate cuts loom for ailing economy – CBA tips rates to hit 0.75% within months as RBA signals further cuts

(19 June 2019, The Age, p1, By Eryk Bagshaw and Shane Wright) ‘Australia’s biggest lender has predicted interest rates will fall below 1 per cent by November, as the Reserve Bank looks to jolt the economy out of a stupor while Parliament argues over tax cuts. The Commonwealth Bank jumped on signals from the central … Continue reading

19 June 2019 (AFR) – South Australia leads 10.7 per cent surge in farmland values

(19 June 2019, AFR, p35, Larry Schlesinger, Reporter) ‘Australian farmland defied the crippling drought and unpredictable weather patterns in 2018 with median land values surging 10.7 per cent, according to Rural Bank’s annual Australian Farmland Values report. This was the strongest annual rise in the median value of a hectare of productive Australian farmland since … Continue reading

19 June 2019 (AFR) – ‘The debt bomb is still ticking’ – Household debt burden still casts a shadow

(19 June 2019, AFR, p22, Paulina Duran and Jonathan Barrett) ‘Investors in Australian mortgage bonds are demanding higher premiums to buy the riskiest tranches of new debt, as a slowing economy stokes concerns a property downturn could get worse and increase home loan defaults. High-yield investors are receiving up to 40 basis points more than … Continue reading

19 June 2019 (AFR) – Home loan arrears ‘highest in years’

(19 June 2019, AFR, p5, Matthew Cranston, Reporter) ‘The Reserve Bank’s head of financial stability Jonathan Kearns said economic conditions and lending standards have pushed home loan arrears rates higher, a trend that will persist but, at this stage, poses no risk to financial stability. Weak income growth, housing price falls, rising unemployment along with … Continue reading