My take on life in Australia during a recession Going into a recession is bad news. When the economy goes backwards, spending contracts, the jobs market gets tougher, wages go down – the list goes on. This period ahead has come as a shock to many Australians, but there are some things worth noting that might make it easier to bear. Australia has been battling through a calamitous start to 2020 so far. We kicked …
ECONOMICS & MARKETS After the Bell: daily market update, June 3 03 Jun, 2020 It was a historic day for Australia today, as the nation entered its first recession in 29 years. Our senior economist, Diana Mousina, explains how markets fared, and also commented on recent strengths in the Aussie dollar. Important information While every care has been taken in the preparation of this video, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL …
What Australia’s recession will look and feel like A great proportion of the working population have never known a recession in Australia, and others will be haunted by the last in the early 1990s. This time around, I think Australia is in for a different experience to what we’ve seen and known before – and that’s not entirely a bad thing. The Australian government has, rightly, sacrificed economic activity in the name of health in …
The US economy – does the flattening yield curve indicate recession is imminent? Key points If you are worried about a major bear market, the US economy is the key to watch. While traditional measures of the US yield curve have flattened sending warning signs about future growth, it has given false signals in the past, is still positive and other versions of the yield curve point to rising growth. Moreover, apart from very low …
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? 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? 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 …
Australian’s love affair with debt – how big is the risk? Key points Household debt levels in Australia are high compared to other countries and still rising. The rise is not as bad as it looks because its been matched by rising wealth and debt servicing problems are low. However, this could change as interest rates rise and if home prices fall sharply. The trigger for major problems remains hard to see but its worth …
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 …
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 …
