Market Update 25 June Global share markets rebounded over the past week with US shares making it to a new record high helped by calming words from the Fed. However, Australian shares fell partly in delayed reaction to the previous weeks falls in the US and not helped by talk of earlier rate hikes in Australia and coronavirus concerns, with IT and materials up but falls led by health and financial stocks. Bond yields rose …
Central banks heading towards the easing exits – five reasons not to be too concerned Key points The gradual shift of central banks including the Fed and RBA towards an exit from monetary easing has caused some volatility in investment markets. We continue to expect the first RBA rate hike to be in 2023, albeit there is a risk it could come in late 2022. However, there are five reasons not to be too concerned: …
Market Update 18 June Investment markets and key developments over the past week While US shares fell over the last week as the Fed surprised on the hawkish side and Chinese shares also fell, Eurozone and Japanese shares rose benefitting from reopening and having central banks that are a long way behind the Fed. Australian shares also had a strong week rising to a new record high although this was led by IT, health, retail …
Market Update 11 June Investment markets and key developments over the past week Global share markets mostly rallied over the last week. The big surprise perhaps was the US where shares rallied to a new record high and bond yields fell despite another surge in inflation, because investors (rightly in my view) interpreted the make-up of higher than expected inflation for May as consistent with the Fed’s assessment that the spike in inflation would be …
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 …
The Australian economic recovery remained strong in the March quarter with GDP up 1.8% – seven reasons for optimism Key points With growth of 1.8% in the March quarter, Australian GDP is now back above its pre pandemic level. While uncertainties remain – including around the latest coronavirus outbreak in Victoria – there are seven reasons for optimism that the recovery will continue at a decent rate: vaccines; global growth is ramping up; consumer spending …
Market Update 28 May Investment markets and key developments over the past week Global share markets rebounded over the last week as inflation fears faded a bit and economic data indicated that the recovery continues. The positive global lead saw the Australian share market shake off worries about the dip in the iron ore price and the latest Victorian snap lockdown and rise to a new record, led by very strong gains in telcos, IT, …
Inflation Q&A – should we be worried about higher inflation? Key points Inflation will likely rise further in the months ahead due to base effects, bottlenecks & reopening but it’s likely to fall back again from later this year as these drivers fade. Shares face short-term correction risks but as inflation settles the broad trend is likely to remain up. Viewed in a very long-term context, we are likely now going through the bottoming of …
Market Update 21 May Investment markets and key developments over the past week Share markets had a bit of a rough ride with inflation fears continuing to impact and this left them mixed for the week with US and Eurozone shares down but Japanese and Chinese shares up. Australian shares were hit hard earlier in the week by inflation fears and concerns about China diversifying its iron ore supply away from Australia (which is …
Market Update 14 May Source: Bloomberg, FXStreet, AMP Capital Investment markets and key developments over the past week Share markets fell over the past week as US inflation data for April came in far stronger than expected raising fears of an earlier Fed tightening, before a rebound later in the week – partly helped by softer US retail sales which took some pressure off bond yields – pared losses. So, despite the sharp fall earlier in …
