If you would like to be added to the Weekly Wrap Newsletter please register here. Capital raisings set to continue The uncertainty about the impact of the pandemic has sparked many capital raisings on stock exchanges around the world. Australia has raised $30bn of capital from the beginning of the year to the start of August…
If you would like to be added to the Weekly Wrap Newsletter please register here. Decoupling or Boycotting Australia China wants the US to accommodate a different political, economic and values system. But the US believes China wants to erode free-market norms and democracy. America has wanted to protect itself from and terms of trade imbalance…
If you would like to be added to the Weekly Wrap Newsletter please register here. Chinese Trade Whilst analysts had expected exports from China to fall by 0.6% for July they actually rose 7.2% due to demand for medical goods and automobiles as COVID-19 restrictions relaxed around the world. This sort of strength means Australia’s raw…
The Australian Dollar From the middle of the GFC the A$:USD appreciated from 65c to $1.00+. Similarly, from the end of March 2020 our currency has surged from a low of 58c to 72c. This is a mammoth move. Exporters must cope with these currency moves as foreign buyers pay more Australian dollars for our…
Gold Prices Gold is a highly speculative metal. It is a different type of asset as it isn’t based on an income stream like most shares, property, bonds and cash. In addition, the supply of every ounce produced still exists and can come back on to the market, however unlikely. Herd mentality plays a huge…
Economic Update The budget has been deferred and this week’s economic update was the first chance to see the “damage” and understand what is likely to occur in 2021. There are a lot of numbers but critically unemployment is forecast to peak at 9.25% by Christmas and drop from there. Unemployment is now 7.4%. Going…
The Economy Australian unemployment rose to 7.4%, but if you add those on JobKeeper this number would be 13%+. We remain of the view that ongoing support will be needed beyond the initial JobKeeper period – regardless of what they name it. Clearly this unemployment number will be further affected by Victorian lockdowns – as…
Ongoing relations with China We may benefit from bringing in migrants from Hong Kong but at what cost. The trade tensions continue with more antagonistic noises from China in response to Australia involving itself in Hong Kong and other matters. The time is rapidly approaching for us to stand up to for what is best…
A typical pattern for a correction looks a little like this. The first phase is panic selling, indiscriminate selling, regardless of the company. High risk, high uncertainty. The second phase is the snap-back – a sharp recovery where the market realises that its oversold. It does not really know by how much – it’s still…
Financial markets are paranoid about an acceleration in new coronavirus cases, driven by the concern about a larger and longer global recession than expected. This concern was sparked by outbreaks in Beijing, Tokyo and the continuation of problems in US. Therefore, the market recovery is based on a reduction in social distancing practices but not…
Oil had its first weekly decline in over a month, dragged down by the broader selloff. OPEC confirmed a continuation of supply cuts with “overproducing nations” forced to pull back production into the future. This will stop the downward pressure on price which existed 6 weeks ago. At the same time, we have the start…
Since coronavirus struck the world has been a very strange place. After falling very rapidly, the markets bottomed at the 23rd of March when the ASX200 index was at 4650 (approx.). Whilst the markets have done a dance with volatility they have risen significantly since then. Today the ASX200 stands at around 6000. When we…
For those who can access Ausbiz News, Michael Dee was interviewed by Ingrid Willinge from Ausbiz on “A big step up in Trade Wars”. China v USA, China v Australia and soon China v India. China v Hong Kong. Where to from here? What it means for markets. To view the interview click here to…
When we talk about house prices remember we are not referring to selling of the same house so measurement of price change is very imprecise. But like any good asset it will have a price set by supply and demand. Demand is currently being affected by income constraints and supply is adjusting. Those that must…
Pythagoras investing explains its view of house price falls and where to from here?