In the absence of any significant economic data the market last week was consumed by Trump economic policy conspiracies. This led the equity market to fresh highs and to a significant surge in bond yields. It is hard to fathom the markets economic logic with its Trump economic policy assumptions. He won’t get anything done … Read more
Over the past 2 years we have been very much focused on expanding our global network of investors, economists, analysts and industry experts we regularly touch base with so that we can drive better portfolio outcomes for our clients. Whilst we conduct our own independent research across all asset classes and investments, it’s important we … Read more
After a long hiatus, the EFG podcast returns as Mike and Sam catch up to talk through the big issues and talking points in financial markets right now and what to keep an eye on. Here’s a quick summary of what they talked about. Current Market ConditionsThe stock markets, especially in Australia and the U.S., … Read more
Last week’s Australian Labour force data was much stronger than expected but that did not stop some bank economists trying to downplay it by pointing out that a great deal of the employment increase came from government related services (Education, Health and Administration). We view these jobs as a lot more permanent than private sector … Read more
The following Chanticleer article in last weeks AFR was typically light on detail (Why Ray Dalio and Jamie Demon are looking past interest rate cuts to the ‘ticking time bomb’ of debt, inflation and geopolitics (afr.com)), but if we accept the headlines are true (just for a moment), these are: US Economy is in relatively … Read more
The huge 254,000 increase (remember that on average a 150,000 monthly increase is normal in an economic recovery period) in non-farm payrolls on Friday night was a shock – even for our expectations. The market was expecting a 140,000 increase and no revisions to July or August. Not only was the September reading very strong … Read more
Australia’s only PMI reading is the S&P PMI badged as the Judo Bank PMI. We have found both the S&P and ISM PMI readings have given false signals since the pandemic lockdowns. One of the reasons that the PMI data has been giving false signals, notably in mid-2022 when it signalled a sharp economic contraction … Read more
Australia’s negative gearing back in the headlines. Before we get to what is driving markets globally, it is worth highlighting that the sensitive topic of negative gearing is back doing the domestic headlines. Australians have an affinity to the housing market (often the largest component of their total wealth) and a large part of the … Read more
Hybrids – Yields set to fall The recent APRA paper proposing changes to a bank’s capital structure will reduce the requirement of banks to issue hybrids (Capital Notes or AT1 capital). Whilst there is much water to flow under the bridge on how this plays out, the current crop of listed hybrids will be well … Read more
The way the markets reacted to the US data releases last week was a little odd. Perhaps the Wall Street Junkies are all blinded by the impending Federal Reserve interest rate decision where they now expect a 50bps cut and if they don’t get it they will not be happy because it will be sobering? … Read more