Inflation in the 70s – baby boomer fantasy or nightmare? Why central banks must focus on getting inflation back down | AMP Capital

Inflation in the 70s – baby boomer fantasy or nightmare? Why central banks must focus on getting inflation back down   Key points The high inflation of the 1970s was bad for economies and bad for investment returns. The long-term downtrend in inflation and interest rates is likely over removing a tailwind for investment returns. But a return to sustained 1970’s levels of inflation appears unlikely. Introduction I grew up in the 1970s and it …

Australia’s Achilles’ heel – high household debt and rising interest rates…it’s not as bad as it looks, but it’s still an issue | AMP Capital

Australia’s Achilles’ heel – high household debt and rising interest rates…it’s not as bad as it looks, but it’s still an issue   Key points Australian household debt has risen dramatically since the 1980s and is high compared to other countries. The rise is not as bad as it looks because it’s been matched by rising wealth and debt servicing problems are low. However, this will likely change as interest rates rise further & if …

Market Update 12 November | AMP Capital

Market Update 12 November Investment markets & key developments Share markets were hit again over the past week as more high inflation readings added to concernsabout monetary tightening. This left US and European shares down for the week and Japanese shares little changed. Chinese shares bucked the trend and rose. While falls in US shares weighed on the Australian share market mid-week a strong rise on Friday left it little changed for the week with strong …

Market Update 22 October | AMP Capital

Market Update 22 October Investment markets & key developments US shares made it to a new high in the past week helped by strong earnings results and good economic data, and Chinese shares rose but European and Japanese shares pulled back slightly. The positive US lead also saw Australian shares rise helped by reopening optimism led by gains from property, IT, retail and financial shares. Bond yields resumed their upswing with 10-year bond yields in the …

Five reasons why the Australian dollar is likely to resume its upswing over the next 12 months | AMP Capital

Five reasons why the Australian dollar is likely to resume its upswing over the next 12 months   Key Points Since its February high of around $US0.80 the $A the $A has fallen on the back of global growth concerns, a slowdown in China and the Delta outbreak in Australia. However, there is good reason to expect the $A to resume its rising trend: sentiment towards the $A is negative; global growth is likely to …

Inflation – why it matters for investment markets | AMP Capital

  Inflation – why it matters for investment markets Key points The shift from high inflation to low inflation has been a key tailwind for investment returns over the last 40 years – in particular it has allowed capital growth in excess of growth in earnings and rents. A long-term stabilisation in inflation around central bank targets which is our base case would remove this tailwind but still allow reasonable returns, whereas a sustained break …

Joe Biden on track to become US president – implications for investors and Australia

Joe Biden on track to become US president – implications for investors and Australia   Key points The US election has been close and final counting as well as legal challenges could still upset the result, but the now highly likely outcome is a Biden Presidency. While there is a possibility that the Democrats could win control of the Senate via runoff elections in Georgia, the most likely outcome is that Democrats will retain control …

Mixed outlook for Australian housing amid prolonged pandemic

  Mixed outlook for Australian housing amid prolonged pandemic   A relatively high rate of unemployment across the nation, coupled with a freeze on immigration, and consequently population growth, might ordinarily spell bad news for the housing market. Instead, Australian capital city average dwelling prices rose 0.2% in October, according to CoreLogic, the first monthly gain since April and hot on the heels of a cumulative contraction of almost 3% between April and September. Prices …

Market Update 04 September 2020 | AMP Capital

Market Update 04 September 2020 Investment markets and key developments over the past week US shares hit another record high mid-week only to be reversed by the end of the week because of a big fall in tech shares, which have been driving the rebound in US equities since the March lows. The US S&P is down by 1.5% over the week, with the tech sector (which has the biggest weight in the index) down …

Shares climb a “wall of worry” – but is it sustainable? | AMP Capital

Shares climb a “wall of worry” – but is it sustainable? Key points The strong rally in shares since their March lows reflects a combination of economic reopening, signs of recovery, policy stimulus and once pessimistic investors closing underweight or short positions. Shares are vulnerable to a short-term consolidation or pullback. But if we are right, and April was the low in economic conditions, then shares are likely to be higher on a 6 to …