US markets takes out Gold and Silver - leaves Europe in its wake
Market & Economic Insights
The results are in – some of the best performing developed market assets for 2014 were US Equities and the US Dollar. As a result in USD terms the US market has outperformed Europe by the widest margin in 40 years. This widening gap between the US and Europe economies will be a major theme for 2015.
- sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
Published on 09 Dec 14
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Venezuela tension heats up
Duration 03:16
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Aussie dollar surprises market
Duration 03:10
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Markets climb as investors watch US healt...
Duration 02:31
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Market & Economic Insights
The results are in – some of the best performing developed market assets for 2014 were US Equities and the US Dollar. As a result in USD terms the US market has outperformed Europe by the widest margin in 40 years. This widening gap between the US and Europe economies will be a major theme for 2015.Sponsor - Wealth Know How
Wealth Know How is the online network helping people manage their wealth through financial education. Whether you are looking for simple ways to better manage your cash, or you are after a complete strategy on how to save for retirement, we can help you understand your options. It is important to have a vision for your future, but its knowledge not dreams that will ultimately deliver financial success.
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Venezuela tension heats up
Duration 03:16
-
Aussie dollar surprises market
Duration 03:10
-
Markets climb as investors watch US healthcare bill
Duration 02:31
Recent economic numbers confirms that the US economic growth is accelerating and the labour market continues to improve.
Fed officials keep stressing that any decision to lift interest rates is data dependent. This latest set of data is pretty conclusive. This bolsters our expectation that the Fed will begin to hike interest rates by June, if not as soon as March, next year.
In stark contrast to the US, Q3 GDP growth for the euro-zone provided little hope that the region’s lacklustre economic recovery is about to find any meaningful momentum.
After leaving interest rates and other policy measures unchanged - the European Central Bank gave its strongest indication yet that it is finally about to launch a comprehensive quantitative easing program.
ECB President Draghi has conceded that existing policies are unlikely to achieve their goals. He repeated the Council’s unanimous commitment to using additional unconventional instruments to lift growth in the euro-zone. He also stated that ECB staff have “stepped up” their preparations for further measures.
Given all this, the failure to launch quantitative easing at the next policy meeting of the ECB on January 22nd would be a major disappointment.
We estimate at the moment 83% of world equity market capitalisation is currently supported by zero rate interest policies!
In Australia the Financial Service Inquiry has found that Australia’s banks need to hold more capital to ensure they enter the top quartile of global banks. This would create a financial system more resilient to shocks and less prone to crisis.
The result would see an increase in tier 1 capital for the banks.
For Australians, this could lead to relatively lower term deposit rates and relatively higher interest rates for borrowers. Whilst the findings are recommendations only, and it is too early to know how the government will respond, we will be watching banking stocks over the next week or so to see how they respond.