Chris Weston, Chief Market Strategist at IG Markets A fairly uneventful session in Asia, with S&P futures starting to roll over somewhat, although many in the market still feels like it could push to the February high of 1940 (1947.2 in the cash market). This seems like a pivotal level now for the world institutional
Cross-posted from The Conversation: The Labor party took everyone by surprise over the weekend when it announced it would limit negative gearing to new housing and reduce the capital gains tax discount to 25%. Proving negative gearing is no longer politically untouchable, the government has hinted its own policy may go some way in the
The dead cat bounce has stalled again. Banks are largely firm with CBA up 0.5%, WBC 0.9%, NAB 2.3%, ANZ 0.6%, but juniors doing worse as BOQ falls -0.1%, BEN -1% and SUN 1%: Big iron has split with BHP down -3% on oil, RIO -1.3% but FMG up 2.7% FMG has actually broken out again: But
Rob Burgess from The New Daily has written a ripper article today dissecting the political economy surrounding Labor’s proposal to reform negative gearing and the capital gains tax discount, which he argues is a battle between rent-seekers and ordinary taxpayers: The biggest losers under Labor’s plan would be the rent-seekers, powerful interests able to earn
Suddenly hard. From China Law Blog: File this one under “just when I thought I had seen/heard everything.” A month ago (exactly) we wrote about how it is getting a lot tougher to get money out of China. See Getting Money Out of China: What The Heck is Happening? Two weeks later, our own Steve Dickinson was
By Leith van Onselen The Housing Industry Association (HIA) has released its land sales report for the September quarter of 2015, which revealed a widening divergence between vacant land prices, which continue to climb to record highs, and the number of land sales, which fell again in the latest quarter and have tanked over the
It won’t be news to readers even if it will surprise Minister Frydencoal. Woodside’s Browse project is now dead, from The Australian: While it is still being looked at under a schedule of a second-half final investment decision, Woodside managing director Peter Coleman was sounding very downbeat about the project on a media call this
The CBA economics team has produced a good report today examining why Australia’s non-mining business investment has failed to launch as promised by the RBA: For the past few years, economists and policymakers have assumed that a lift in non-mining business investment was forthcoming. A trawl through RBA documents and speeches shows that policy officials
Karen Maley does it today: What to make of China? Investors trying to get a read on the health of the world’s second largest economy – and its biggest commodity consumers – are left confused by the contradictory claims of both the bulls and the bears. …The bulls were heartened by signs that total financing in
From Bill Evans: Disappointing results continue. The Index has now been growing below trend for the last nine months. It continues to signal that growth in the Australian economy in the first half of 2016 will be below trend. Today’s print represents the largest negative deviation we have seen since the second half of 2011.
From Gotti today: Last night’s arrangements between Saudi Arabia and Russia will go down as a historic turning point in global affairs. It’s an enormous relief to Australia’s struggling LNG producers and underlines the view of CSL chief executive Paul Perreault that share markets may be too pessimistic about the world outlook. In itself, the
By Leith van Onselen Infrastructure Australia (IA) has urged the government to implement user-pay reforms to road charging to fund desperately needed upgrades to infrastructure to support the rapidly growing population. From The Australian: The landmark 15-year national infrastructure plan, to be released today, warns that unless Australia recaptures the “reform spirit” of the 1980s
From the ANZ quarterly update today: Bad debts up, largely in Asia. The other point of interest is the net interest margins remained stable only because the banks hiked rates in the quarter. Funding costs since then have ripped higher with ANZ sitting at 137bps today versus a third quarter average in the mid-80s range:
Watch Sunrise host David Koch and guest SQM Research’s Louis Christopher fight the good fight today on negative gearing. Good work boys!
by Chris Becker Mixed is the appropriate way to describe price action on markets last night as US traders returned from a long weekend amid OPEC shenigans as highlighted by HnH this morning. Oil and other commodities returned to their volatile paths, with Brent slammed alongside gold although strangely copper saw a bid. Bond markets
By Leith van Onselen Watching Prime Minister Malcolm Turnbull tie himself in knots over negative gearing is like watching a slow motion train wreck. At the start of the week, Turnbull attacked Labor’s negative gearing and CGT policy because they would not raise enough Budget revenue – despite the independent Parliamentary Budget Office (PBO) estimating
The Mining GFC that is. The US dollar was strong: Commodity currencies were hammered: Oil routed: Base metals hit: Miners mostly held up: The high yield rally stalled: US energy credit risk soared, from ZH: And it is interesting to note what BofAML‘s big money clients are now worried about, from last month: Now: The
The AFR lines up executives for and against negative gearing reform today: Prominent investor Peter Morgan has labelled negative gearing a “Ponzi scheme” and said it posed a risk to the financial system… “At some stage negative gearing has got to go, not necessarily for the tax reasons, but for the leverage it’s putting into the property market, which
By Leith van Onselen Let’s take a walk down memory lane. In 2003, then founder of Wizard Mortgages, Mark Bouris, called for a review of negative gearing, claiming that too many Australians were using the tax lurk to buy real estate: Wizard’s executive chair Mark Bouris says negative gearing is being used for incorrect taxation
According to Wikipaedia, rent seeking is: When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation. The Reserve Bank of Australia and Treasury now epitomise this definition. How? They are advising Prime Minister Turnbull to hose down all reform
By Leith van Onselen SQM Research has released its rental vacancy data, which registered a seasonal fall in the rental vacancy rate across the nation in January, although the vacancy rate was up by 0.2% over the year and has equaled the post-GFC high in trend terms (see below). As shown above, the commodities bust
From a speech yesterday by Resources Minister Josh Frydencoal: In the years ahead to 2040, the LNG projects in Western Australia alone – Wheatstone, Pluto, Gorgon and North West Shelf – are expected to contribute a further $160 billion in taxes and royalties. This revenue flow is just part of the economic dividend that comes
Here are the iron ore charts for February 16, 2016: Spot firmed with Tianjin benchmark up 50 cents to $46.10. Paper softened. Rebar still holding. The last chart is the CISA fast data for late January which shows steel mills cutting output another -0.5% to 1.5 million tonnes per day, below 2011 levels for the
Hoocoodanode that this was coming? From Reuters: Russia and Saudi Arabia dashed expectations of an outright supply cut by agreeing only to freeze output if other big exporters joined them. Benchmark Brent prices jumped briefly through $35 a barrel after Russia and Saudi Arabia agreed to keep output at January levels, in what could be
From Goldman: January’s credit data was exceedingly strong. Part of the demand for new RMB loans is from demand to borrow RMB and pay down USD debt, though banks may have also started to behave differently amid profit pressures. The temporary suspension of local government bond issuance also directed more borrowing to bank loans and
