Econosights – The end of Japanese stagnation?

Econosights – The end of Japanese stagnation? Key points Years of low growth and inflation are gradually turning around in Japan thanks to the slow-moving impacts of Abenomics combined with a strong global economy. A lift in growth and employment reforms are increasing participation in the labour market, adding to an already tight labour market. Recent wage agreements will add to inflation. The solid economic cycle and good corporate health is positive news for Japanese …

Share market volatility – Trump and trade war risks

Share market volatility – Trump and trade war risks Key points Worries about the Fed, trade wars (the risk of which has been significantly exaggerated) and President Trump generally have increased the risk around the global outlook but are unlikely to drive a major bear market. The key issue is whether the US is about to enter a recession and our assessment remains that a US recession is not imminent. The key for investors is …

Where are we in the unlisted commercial property cycle?

Where are we in the unlisted commercial property cycle? Key points Australian unlisted commercial property returns have been very strong this decade thanks largely to the “search for attractive yield” by investors. This return driver is expected to start to fade but rising rents, particularly in the south-east office markets, will provide an offset keeping returns solid for now. Commercial property yields still offer a strong premium relative to bonds suggesting we are a long …

The “gradually” maturing investment cycle – what is the risk of a US recession?

The “gradually” maturing investment cycle – what is the risk of a US recession? Key points With inflationary pressures starting to rise in the US the global investment cycle is starting to get more mature. This is likely to mean a further rise in bond yields and more share market volatility. However, there is still little sign of the sort of excesses that precede economic downturns, profit slumps and major bear markets suggesting that we …

Equities riding on fear not fundamentals

Equities riding on fear not fundamentals “The only thing we have to fear is fear itself,” said Franklin D Roosevelt at his inauguration as US President in 1933. I think “the only thing we have to fear is the fear index itself” is a better description of where investors are at right now. It’s been a wild ride on Wall Street and beyond of the past week – the worst in two years for the …

5 ways to keep a cool head in a falling share market

5 ways to keep a cool head in a falling share market Despite concern, falling share prices are not necessarily a sign of a mild or major bear market situation, according to Dr Shane Oliver. The share market correction many people are talking about at the moment is causing concern for a number of investors, including those accumulating super and drawing money from their super savings, which is understandable given the rapid falls we’ve seen …

The pullback in shares – seven reasons not to be too concerned

09 February 2018 The pullback in shares – seven reasons not to be too concerned Key points The current pullback in shares has been triggered by worries around US inflation, the Fed and rising bond yields but made worse by an unwinding of bets that volatility would continue to fall. We may have seen the worst, but it’s too early to say for sure. However, our view remains that it’s just another correction. Key things …

What high household debt means for investors

What high household debt means for investors “High house-hold debt is Australia’s Achilles heel,” says AMP Capital Head of Investment Strategy and Economics and Chief Economist, Shane Oliver. “I’ve been thinking this for many years now and yet it seems to keep going higher.” Latest data from the Australian Bureau of Statistics puts total household liabilities at $2.466 trillion, or 199.7 percent of disposable income, putting it among the highest in the world. Australians have …

Correction time for shares?

Correction time for shares? Key points The US share market is long overdue a decent correction. This now appears to be unfolding and may have further to go as higher inflation, a slightly more aggressive Fed and higher bond yields are factored in. This will impact most share markets including Australian shares. However, in the absence of an aggressive 1994 style back-up in bond yields or a US recession – neither of which we expect …

Volatility could present buying opportunities in 2018

Volatility could present buying opportunities in 2018 Volatility and the first meaningful lift in inflation coming from the United States will likely be the main differentiating features in global financial markets in 2018 compared to this year, according to Dr Shane Oliver, AMP Capital’s Head of Investment Strategy and Chief Economist. The dips in share markets experts anticipated in 2017 are more likely to materialise in the new year, Oliver notes. But with global growth …