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Watch Video for Free Now! 03:05
1430198664george24
15 years later and the NASDAQ finally hits new highs

Commentary & Opinion, Market Economic

It’s only taken 15 years but the Nasdaq Index has finally recovered from the dramatic dotcom bust.  Bell-weather technology stocks like Google and Amazon have helped push the technology weighted index along thanks to high-than-expected earnings.  This is not like the dotcom days when the companies had no earnings.
More broadly in the US, the market is now anticipating a rate hike in September. Eyes will be on the following data this week to confirm or change this view:

Watch Video for Free Now! 03:23
1412121612george88
4 reasons why the market fell

Commentary & Opinion, Economic Market

Like Australia, many global equity markets have taken a turn downwards, with the falls in the markets closely linked to the rise of the US Dollar.  However, the S&P500 and Nikkei 225 have bucked this trend to hold up pretty well during September.  

Watch Video for Free Now! 02:42
1450136727mec
A review of 2015

Commentary & Opinion, Economic Market

The year is almost over. Its biggest event as far as markets are concerned — the first rise in US interest rates in almost a decade — is still ahead, but now seems a certainty.
At the outset of 2015, there was a consensus that the Federal Reserve would start to raise rates, and that the European Central Bank, far more reluctant to ease monetary policy, would be obliged to resort to quantitative easing to support its economy.
The Federal Reserve, following the broadly positive US employment report for November, is almost certain to raise rates this month. The ECB last week has cut rates and extended quantitative easing again.

Watch Video for Free Now! 00:00
1414536219george1
All eyes on equities but US T-Bonds is where it’s at

Commentary & Opinion, Economic Market

Some big moves in the Dow Jones, the S&P500 and, to a lesser extent, the ASX200 have caused discussion amongst investors and prompted suggestions that we are in a high volatility environment.

Watch Video for Free Now! 03:02
1424216408george16
All eyes on Greece debt drama

Commentary & Opinion, Economic Market

Equity markets continue to perform well; helped along by the bounce back in oil prices; and more certainty around the first US rate rise. However; the eyes of the world are on Greece this week as the country stares down its creditors.
Finance ministers from the euro-zone are trying to reach a deal on Greece that would enable the country to meet its near-term financial obligations.

Watch Video for Free Now! 03:15
1402444891george22
Are investors turning a blind eye to positive indicators?

Commentary & Opinion, Economic Market

Despite a wave of positive numbers – GDP, employment, interest rates, equity markets – investors seem reluctant to pull themselves out of their current state of pessimism. We’re not sure why. 

Watch Video for Free Now! 03:10
1501630383mec
Aussie dollar surprises market

Commentary & Opinion, Economic Market


The Australian dollar’s strong rally in recent weeks has caught the market by surprise.  It could even push higher – even maybe hitting US$0.85. That’s a big jump when it was just US$0.74 back at the start of June.
 
The strength of the currency reflects some main factors:
 
Like an increasing chance of a rate rise in Australia on the back of economic strength. Saying that, we don’t expect the Reserve Bank of Australia to hike rates soon. Also, global growth continues to be resilient which supports the China story. China has released some unexpectedly upbeat data, which has prompted an increase in the price of industrial metals.
 
Even with weaker-than-expected inflation numbers in Australia the dollar has still been strong.
 
How long the Australian Dollar will be strong for is still to be seen. The Chinese economy may lose some momentum in the second half of the year, which could affect our currency.
 
At the end of the day, it will be the strength of industrial commodities like Oil and Iron Ore which will drive the direction of the Australian dollar.
 
Speaking of oil, the price continues to rally driven by large falls in US crude and gasoline stock, as well as a pick-up in demand. The weakness of the US Dollar against major currencies is also aiding the oil price.
 
Current geo-political risks including issues in Venezuela, the proxy war in Yemen - between Iran & Saudi Arabia - and the problem of North Korea could also add fuel to the rally in the price of oil.
 
Equity markets, however, will remain on a cautious footing as technology stocks retreat and US wage growth softens.
 
The latest sell-off in tech stocks has made for dramatic headlines, comparable with the dot com collapse. However, unlike back then, the key difference is that the recent strength appears to be justified by improved earnings – both actual and projected.   This contrasts with the hype of the dot com era which was based on projected earnings alone
 
Finally, a word on emerging market equities which have continued to rise recently. Despite the gains, valuation levels still appear quite low compared to developed market equities. Further rises in valuations and earnings should help emerging market equities to keep on climbing.  Not necessarily at the pace they have done so far in 2017.

Watch Video for Free Now! 02:49
1494385743mec
Aussie dollar to weaken

Commentary & Opinion, Economic Market

The Aussie dollar is likely to remain under pressure for the time being as commodity prices continue to fall and Australia’s interest rate premium narrows.
 
The price of Australia’s main commodity exports iron ore and coal have a strong influence on the value of the Australian dollar. Recently, iron ore prices have fallen to about $65 a tonne – a big drop compared to the $90 a tonne they reached late last year and earlier this year.
 
Even when pricing hit $90, the Australian dollar didn’t get much above 75 cents. This doesn’t paint a strengthening outlook for the Australian Dollar in the current environment.  

Watch Video for Free Now! 03:19
1433901621george_27
Australian banks out of favour – globally!

Commentary & Opinion, Market Economic

Australia’s stronger GDP number released last week has reduced expectations that interest rates will be cut again by the RBA.
This did not help the yield-sensitive banking sector, which was subsequently sold off. In fact, banks have been a major cause of the 3% decline in the Australian market during the past two weeks. 
Much of the problem is coming from overseas investors exiting Australian banks in favour of European and US bank.
The US banking sector is becoming more attractive as US long bond yields rise. Rising yields support overseas bank margins making them more attractive than Australian banks.

see more

Watch Video for Free Now! 03:05
Thumb_1430198664george24
15 years later and the NASDAQ finally hits new highs

Commentary & Opinion, Market Economic

It’s only taken 15 years but the Nasdaq Index has finally recovered from the dramatic dotcom bust.  Bell-weather technology stocks like Google and Amazon have helped push the technology weighted index along thanks to high-than-expected earnings.  This is not like the dotcom days when the companies had no earnings.
More broadly in the US, the market is now anticipating a rate hike in September. Eyes will be on the following data this week to confirm or change this view:

Watch Video for Free Now! 03:23
Thumb_1412121612george88
4 reasons why the market fell

Commentary & Opinion, Economic Market

Like Australia, many global equity markets have taken a turn downwards, with the falls in the markets closely linked to the rise of the US Dollar.  However, the S&P500 and Nikkei 225 have bucked this trend to hold up pretty well during September.  

Watch Video for Free Now! 02:42
Thumb_1450136727mec
A review of 2015

Commentary & Opinion, Economic Market

The year is almost over. Its biggest event as far as markets are concerned — the first rise in US interest rates in almost a decade — is still ahead, but now seems a certainty.
At the outset of 2015, there was a consensus that the Federal Reserve would start to raise rates, and that the European Central Bank, far more reluctant to ease monetary policy, would be obliged to resort to quantitative easing to support its economy.
The Federal Reserve, following the broadly positive US employment report for November, is almost certain to raise rates this month. The ECB last week has cut rates and extended quantitative easing again.

Watch Video for Free Now! 00:00
Thumb_1414536219george1
All eyes on equities but US T-Bonds is where it’s at

Commentary & Opinion, Economic Market

Some big moves in the Dow Jones, the S&P500 and, to a lesser extent, the ASX200 have caused discussion amongst investors and prompted suggestions that we are in a high volatility environment.

Watch Video for Free Now! 03:02
Thumb_1424216408george16
All eyes on Greece debt drama

Commentary & Opinion, Economic Market

Equity markets continue to perform well; helped along by the bounce back in oil prices; and more certainty around the first US rate rise. However; the eyes of the world are on Greece this week as the country stares down its creditors.
Finance ministers from the euro-zone are trying to reach a deal on Greece that would enable the country to meet its near-term financial obligations.

Watch Video for Free Now! 03:15
Thumb_1402444891george22
Are investors turning a blind eye to positive indicators?

Commentary & Opinion, Economic Market

Despite a wave of positive numbers – GDP, employment, interest rates, equity markets – investors seem reluctant to pull themselves out of their current state of pessimism. We’re not sure why. 

Watch Video for Free Now! 03:10
Thumb_1501630383mec
Aussie dollar surprises market

Commentary & Opinion, Economic Market


The Australian dollar’s strong rally in recent weeks has caught the market by surprise.  It could even push higher – even maybe hitting US$0.85. That’s a big jump when it was just US$0.74 back at the start of June.
 
The strength of the currency reflects some main factors:
 
Like an increasing chance of a rate rise in Australia on the back of economic strength. Saying that, we don’t expect the Reserve Bank of Australia to hike rates soon. Also, global growth continues to be resilient which supports the China story. China has released some unexpectedly upbeat data, which has prompted an increase in the price of industrial metals.
 
Even with weaker-than-expected inflation numbers in Australia the dollar has still been strong.
 
How long the Australian Dollar will be strong for is still to be seen. The Chinese economy may lose some momentum in the second half of the year, which could affect our currency.
 
At the end of the day, it will be the strength of industrial commodities like Oil and Iron Ore which will drive the direction of the Australian dollar.
 
Speaking of oil, the price continues to rally driven by large falls in US crude and gasoline stock, as well as a pick-up in demand. The weakness of the US Dollar against major currencies is also aiding the oil price.
 
Current geo-political risks including issues in Venezuela, the proxy war in Yemen - between Iran & Saudi Arabia - and the problem of North Korea could also add fuel to the rally in the price of oil.
 
Equity markets, however, will remain on a cautious footing as technology stocks retreat and US wage growth softens.
 
The latest sell-off in tech stocks has made for dramatic headlines, comparable with the dot com collapse. However, unlike back then, the key difference is that the recent strength appears to be justified by improved earnings – both actual and projected.   This contrasts with the hype of the dot com era which was based on projected earnings alone
 
Finally, a word on emerging market equities which have continued to rise recently. Despite the gains, valuation levels still appear quite low compared to developed market equities. Further rises in valuations and earnings should help emerging market equities to keep on climbing.  Not necessarily at the pace they have done so far in 2017.

Watch Video for Free Now! 02:49
Thumb_1494385743mec
Aussie dollar to weaken

Commentary & Opinion, Economic Market

The Aussie dollar is likely to remain under pressure for the time being as commodity prices continue to fall and Australia’s interest rate premium narrows.
 
The price of Australia’s main commodity exports iron ore and coal have a strong influence on the value of the Australian dollar. Recently, iron ore prices have fallen to about $65 a tonne – a big drop compared to the $90 a tonne they reached late last year and earlier this year.
 
Even when pricing hit $90, the Australian dollar didn’t get much above 75 cents. This doesn’t paint a strengthening outlook for the Australian Dollar in the current environment.  

Watch Video for Free Now! 03:19
Thumb_1433901621george_27
Australian banks out of favour – globally!

Commentary & Opinion, Market Economic

Australia’s stronger GDP number released last week has reduced expectations that interest rates will be cut again by the RBA.
This did not help the yield-sensitive banking sector, which was subsequently sold off. In fact, banks have been a major cause of the 3% decline in the Australian market during the past two weeks. 
Much of the problem is coming from overseas investors exiting Australian banks in favour of European and US bank.
The US banking sector is becoming more attractive as US long bond yields rise. Rising yields support overseas bank margins making them more attractive than Australian banks.

see more