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ASX at the close

Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Greece optimism not enough for Asia Investors are finding themselves questioning the price action we’ve been seeing recently and many are not convinced the gains we’ve been seeing off late are a permanent fixture. This has resulted in a degree of profit taking through

Latest posts

17

Peter Costello continues Budget hypocrisy

By Leith van Onselen Can somebody please tell Peter Costello to shut up about the Budget? After his hypocritical outburst two weeks ago, in which he labelled the Abbott Government’s push for “lower, simpler, fairer” a “morbid Joke”, Costello has returned today with another sermon lambasting Labor’s proposed superannuation reforms whilst telling politicians to stop “soaking

11

Childcare lobby slams activity test

By Leith van Onselen It seems the childcare sector is not too happy about the Productivity Commission’s (PC) final report into childcare, which recommended (among other things) an “activity test” that would only provide childcare subsidies to parents who complete a minimum amount of work. Last night on ABC’s Lateline, Early Childhood Australia slammed the

14

Economists measure China’s hard landing

From the WSJ: When China released its tabulation of first-quarter growth earlier this month, the 7% figure—the worst in six years—stirred fears of a deepening slowdown. It also raised fresh doubt about the trustworthiness of China’s own statistics. “Growth Likely Overstated,” said a Citibank report, concluding that actual quarterly growth could be below 6% year

7

Future Fund warns on bubbles

From The Australian: The Chairman of Australia’s sovereign wealth fund has warned that record low interest rates around the world have pushed up asset prices to the point where they are fully priced and could be risky in the event of tighter monetary policy. “Given the enormous monetary policy stimulus around the world, asset prices

4

Consumer confidence bounces off canvas

By Leith van Onselen The ANZ-Roy Morgan Research consumer confidence index has rebounded following last week’s 8-month low, jumping by 3.0 points to 111.8 in the week ended 26 April, although it is still below the long-run average of 113 (see next chart). According to ANZ: “…the improvement last week was fairly broad-based, with particular

14

Pollies dumb and dumberer on retirement policy

By Leith van Onselen Observing the major parties squabble over retirement policy is like watching a slow motion train wreck. Let’s review some facts. Australia’s population is ageing fast due in part to the pending mass retirement by the large baby boomer generation. Accordingly, the number of workers supporting retirees is projected to shrink over

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Any way you look at it, Sydney housing affordability sucks

By Leith van Onselen Moody’s Investors Service has released its housing affordability report on Australia, which revealed that affordability in the two major capitals – Sydney and Melbourne – has deteriorated despite lower interest rates, although the picture nationally is unchanged. The outlook for Sydney purchases is also dire: Moody’s Australian Housing Affordability Measure — which

10

Macro Morning (China rocket)

By Chris Becker Risk markets were mixed last night with European stocks surging on continued QE from the ECB while US stocks slipped as Apple’s stomping quarterly result could not overshadow poor industrial and biotech earnings reports. A solid but poorer than expected services PMI for April also weighed, as oil took another breather in

17

More negative gearing myths busted

By Leith van Onselen Social Services Minister, Scott Morrison’s claim (here and here) that negative gearing is used primarily by ‘battlers’ has received more punishment today, with new research from The Australia Institute (TAI) revealing that more than half the tax concessions from negative gearing are flowing to the richest 10% of households. From The

22

Murray: “Housing casino” hangs on AAA

Australia’s last benign oligarch standing fights on today, David Murray from the AFR: Mr Murray is insistent that the banks, which rely on foreign funds, are undercapitalised and pose a risk to the Australian economy. Because of expectations the Big Four banks’ debts are underwritten by the federal Treasury, any credit downgrade of the government could hit their AA credit ratings,

4

Shuffle of the iron ore zombies

The AFR is talking up the latest round of Atlas restructuring talks: Atlas Iron has asked secured bondholders to consider receiving equity in lieu of interest payments, while contractors would operate for minimal cost in exchange for compensation when – and if – the iron ore market improves. Where’s the upside for bondholders? The iron ore

8

Daily iron ore price update (legs)

Here are the iron ore price charts for April 27, 2015: Spot rallies on. Tianjin benchmark rose 3% to $58.70. Paper markets continue to forge ahead. Dalian is at 433 this morning up another 1%. Rebar is now getting sucked into the updraft. The two coals are off to the races as well. I can’t

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Daily LNG price update (contract crush)

The Brent oil price fell back last night to $64.77 despite further bombing in Yemen and a weak US dollar. News was scarce. My own view remains that we are close to a new top. Markets are now very long higher prices, from the WSJ: This positioning is consistent with falls ahead not more rises.

14

Can China dodge the middle income trap?

Cross-posted from Investing in Chinese Stocks. China would need to royally screw up its economy in order to get stuck in the middle income trap. History and the performance of Taiwan show China will certainly become a high income country. The path may or may not be straight, but the destination is not in doubt

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Links 28 April 2015

Global Macro / Markets / Investing: The great unraveling of globalization – Washington Post Central bankers as supervisors: The bandwagon effect – VOX ‘Flash Crash’ Investigators Likely Missed Clues – Wall Street Journal Deflation? Oil’s 45 pct rebound could be markets’ next headache – Reuters North America: This Is How Fast America Changes Its Mind

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ASX at the close

Chris Weston, Chief Market Strategist at IG Markets Global equities continue to grind higher with equity bulls the dominant force, despite a number of negative themes which could get more attention. There still seems some room to push higher as only 40% of the key developed markets are above their 2007 peak and strong technical

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Abbott support plumbs new lows

From Roy Morgan Research comes more bad news for Prime Minister Tony Abbott, although opposition leader, Bill Shorten, is on the nose as well: Former Liberal Party Leader Malcolm Turnbull is again clearly preferred as Liberal Leader by 38% of electors (up 2% since January 12-13, 2015) well ahead of Deputy Leader Julie Bishop 27%