ASX at the close

ScreenHunter_31 Jun. 04 16.42 Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Euphoric reaction to Fed meeting With a week to go to Christmas, Santa seems to have finally arrived for global equities. It is now clear just how nervous investors were heading into the December FOMC meeting and that overhang seems to have been removed for now. It was always important for the Fed to get the language right so as not to spook markets at such a fragile time and it seems it has done just that. While the Fed removed the ‘considerable time’ reference, it replaced this by saying it can be ‘patient’ – it...
read more

Some alternatives to Pyne’s uni reforms

ScreenHunter_26 Oct. 16 10.41 Cross-Posted from The Conversation: The government will introduce amended legislation for higher education reform into the Senate next year for further debate. But how do we keep higher education sustainable if the package is torpedoed again? Here are three practical measures that would fix past mistakes and make Australian higher education funding sustainable. Cap funded university places The Rudd-Gillard government’s removal of the cap on funded university places has made Australian higher education funding unsustainable. It resulted in a 20% increase in student numbers between 2008 and...
read more

Aussie stocks 2014: winners and losers

blogphoto-winners-and-losers-web by Chris Becker UBS has a note out today highlighting the winners and losers of Aussie stocks for this calendar year. The absolute return is around 1-2% (or a good day's upmove), if you included dividends and almost no movement in the index itself:   As UBS rightly point out that is a great deal of underperformance vs other stock markets around the world (US S&P500 up 11%, Nikkei up 7%, European stocks up 2%), but more so in USD terms. By theme or sector its no surprise that resources dragged but also consumer staples, with banks only performing on an absolute basis - i.e...
read more

Hockey shuns tax reform

ScreenHunter_4209 Sep. 15 14.37 By Leith van Onselen Treasurer Joe Hockey has this afternoon shunned raising the GST, arguing that there is not enough money in the Budget to provide the necessary compensation to middle and lower income earners. From The AFR: [Hockey] said the recommendation earlier this week by the OECD that the 10 per cent GST should be raised to between 15 per cent and 18 per cent could not be made in isolation. “They are not looking at the full picture. If you increase the GST, you need to compensate middle and low-income Australians with significant tax cuts,’’ he told Channel Seven. “We...
read more

Resources jobs resume their descent

ScreenHunter_03 Jul. 23 09.31 By Leith van Onselen DFP Recruitment has released its mining and resources jobs index for November, which registered a fall of 4.2% to 60.90, marking eight falls out of the past nine months. Year on year, the number of mining and resources job advertisements has fallen by 31.3% nationally, but by only 2.6% in the last quarter. Moreover, since January 2014, advertised permanent opportunities have declined by 33% and Contract and Temporary roles have fallen by 25%. (see next chart). According to DFP, "the principle hiring factor driving the reduction in advertised vacancies is the price of...
read more

Daily LNG price update (first export ready)

APLNG-reaches-key-milestones1 by Chris Becker Brent crude was up nearly 2% overnight and in futures trade today, giving a boost to the LNG contract price: There's news this morning that the first tanker is on its way to Gladstone to pickup its first shipment of LNG. From Bloomberg: The ship, the BG-owned Methane Rita Andrea, is heading for Gladstone, in Queensland state, according to data compiled by Bloomberg. BG expects the plant, the world’s first large-scale project to turn coal-bed methane into LNG, to begin by the end of the year, the company reiterated today. “The initial cargo from QCLNG will most...
read more

Population ponzi slows as mining unwinds

ScreenHunter_5522 Dec. 18 11.48 By Leith van Onselen The ABS has released its Australian demographic statistics for the June quarter of 2014, which revealed that Australia's population growth rate continues to fall, driven by declining growth in the two key mining states of Western Australia and Queensland. According to the ABS, Australia’s population grew by 1.58% in the year to June 2014 - the sixth consecutive quarterly decline in growth - albeit population growth remained well above the 30-year average of 1.4%. The growth in the number of persons in the year to June 2014 was 364,800, which was still 106,178 above...
read more

Daily iron ore price update ($60 floor)

its-all-good1 by Chris Becker Sell offs do not go much smoother than this and has given ample opportunity for the longs and shorts to step off and on, as iron ore hovers just above the five year low:   With the MYEFO forecast target of $60 in sight (down from $95 per tonne from only a year ago that "no one saw coming") BHP has confirmed such a drastic price target calling $USD65 a tonne an "appropriate" target. With a breakeven in the $30 range, of course its appropriate! More from BS: The latest investment bank to lower its forecast is Morgan Stanley, which cut its 2015 prediction by 9...
read more

Stamp duty delivers $555m Budget windfall to NSW

ScreenHunter_5521 Dec. 18 10.18 By Leith van Onselen The NSW Government has today released its Half-Yearly Review for 2014-15, which recorded a massive $555 million Budget turnaround on the back of the booming Sydney housing market (see next chart). As shown in the table below, the 2014-15 Budget had forecast a deficit of $283 million, which now has been revised to a surplus of $272 million, with larger surpluses forecast over the forward estimates: The reason for the massive upward revision was booming transfer (stamp) duties, which "are forecast to be markedly higher, driven by continuing strength in the property...
read more

Why Abbott is failing on infrastructure

ScreenHunter_5488 Dec. 16 10.03 By Leith van Onselen Back in July, Prime Minister Tony Abbott gave an address to the 2014 Economic and Social Outlook Conference Dinner, arguing that Australia needs to invest heavily in infrastructure and outlining why he wants to be known as the "infrastructure Prime Minister" [my emphasis]: An essential part of our Economic Action Strategy is record investment in infrastructure. We need it to address the end of the investment phase of the resources boom. We need it to improve our country’s long-term competitiveness and productivity. And we need it if there is, indeed, to be an...
read more

NZ leads Australia in economic growth

Air_New_Zealand_737_ZK-NGH_Dunedin_Airport by Chris Becker New Zealand's economic growth in the third quarter of 2014 was slightly higher than expected at 1% versus 0.7% but annualised dipped to 3.2% from 3.9% in the last quarter: While a very good result (one Australian Treasury officials would love to have) it might forestall PM John Key's planned return to surplus this financial year, which recently had been pushed out by a year. This is of course a political goal not an economic one as the Kiwis have the same delusional focus on "surpluses forever" as the Australian economic/political quango when both nations need to be...
read more

PS redundancy costs pass $1 billion

ScreenHunter_07 Oct. 11 11.09 By Leith van Onselen The Canberra Times is running an article today claiming that the taxpayer bill for federal public sector redundancies has passed $1 billion: The redundancy bill for departing public servants and other government workers will be more than $1.1 billion in just three years, the latest government data shows. But the real cost of Commonwealth golden handshakes under Labor and Liberal governments since 2012 might be much higher, with the Treasury unable to shake its habit of vastly underestimating the cost of taxpayer-funded redundancy payouts... Monday's Mid-Year Economic...
read more

Macro Morning (Fed bounce)

marketmorning by Chris Becker Thank you Janet Yellen shouted most traders overnight as the FOMC meeting and press conference wrapped up, sending stocks bouncing and risk doubling down again. Buy the dip works! (until it doesn't....) US stocks were the main beneficiaries, with the S&P500 up over 40 points or 2% in a beautiful upswing: I'm looking at the 2030 level on the daily chart and positive momentum before calling this a Santa rally but the DAX daily chart below shows the potential. European cash markets were in the green before closing, but post close futures have rallied alongside the...
read more

Why not offset oil price fall by raising fuel excise?

ScreenHunter_04 Sep. 23 15.14 By Leith van Onselen The Pascometer, Michael Pascoe, was on point yesterday afternoon, recommending that the Abbott Government should offset falls in oil/petrol prices by raising fuel, and in the process undo the Budget damage caused by the Howard Government's decision to freeze the fuel excise in 2001. From The SMH: [The Government should] seize the opportunity of crashing oil prices now to recoup all the indexation that has been forgone. Yep, I'm saying increase the price of petrol by about 12 cents a litre... Hey presto, around $5 billion a year would disappear from Joe's troublesome...
read more

White Paper to urge GST, superannuation tax rises

ScreenHunter_4198 Sep. 15 07.19 By Leith van Onselen The AFR has leaked some details of the upcoming White Paper on tax reform, which is scheduled to be released by the Abbott Government early next year. According to the article, the White Paper will recommend shifting the tax base away from personal income and company taxes by, among other things, raising the GST and increasing taxes on superannuation: The economy’s reliance on income and company taxes has barely shifted since the tax system was conceived after World War II, highlighting an urgent need for reform, the federal ­government’s tax white paper says... The...
read more

US heading down the path of deflation?

downwardspiral by Chris Becker Last night saw the release of the US consumer price index prints for November just before the FOMC meeting and painting a picture of a potential push into deflation for the worlds biggest (2nd?) economy. The headline inflation rate came in at 1.3% annualised, and 1.7% excluding food and energy, with dropping oil prices obviously helping: The monthly change was actually negative at -0.3%, and up 0.1% on the food/energy exclusion. The lack of inflation in an economy that has been juiced by successive rounds of monetary expansion with QE3 finishing last month is telling,...
read more

US Fed stays the course

keep calm stay on target by Chris Becker Last night saw the end of the two day FOMC Meeting by the US Federal Reserve, which released its statement and had Chairman Janet Yellen give a press conference early this morning, Australian time. The key takeaways included: removal of "considerable time" language for keeping zero bound interest rates at current level, but with a hedge, so no real change no change in 2015 and 2016 GDP forecasts (strange given impact of oil prices both globally and China's slowdown) uptick in 2014 GDP growth forecast small reduction in unemployment forecasts to below 6%for this year,...
read more

The history of Australian property values (redux)

ScreenHunter_5518 Dec. 17 15.43 By Philip Soos and Paul D. Egan This chart pack presents the latest statistics for 2014, updating the dataset provided earlier last year. When adjusted for inflation and quality, housing prices have boomed nationwide since 1996, hitting a peak in 2010, before undergoing a slight fall and rise. On current trends, a new, higher peak is likely to be set in 2015. Melbourne has been the epicentre of a number of historical real estate bubbles, with the latest iteration being no different. Compared to the other capital cities, Melbourne has experienced the largest escalation in housing prices,...
read more

Links 18 December 2014

ScreenHunter_01 Apr. 02 06.19 Global Macro / Markets / Investing: Oil Trades Near 5-Year Low as Russia Echoes OPEC Output Policy – Bloomberg Oil Near 5-Year Low as Russia follows OPEC – Reuters Oil Plunge Sets Stage for Energy Defaults: Credit Markets – Bloomberg Buy American? Not so for retail stock fund investors – Reuters Oil plunge sparks US credit market fears – FT.com The First Casualty of a Bear Market - The Reformed Broker Russian Crisis Hits Pimco Fund Wipes Out Options as Ruble Sinks - Bloomberg Bond Investors Are Skittish Over Emerging Markets - New York Times A Pessimist’s Guide to...
read more

ASX at the close

ScreenHunter_31 Jun. 04 16.42 Stan Shamu for Chris Weston, Chief Market Strategist at IG Markets Asia mixed ahead of the Fed Asia is experiencing some mixed moves ahead of the results from the FOMC meeting. There is a lot for investors to digest at the moment but the dominant theme is nervous trading in emerging markets as the Federal Reserve (Fed) is tipped to switch to a hawkish bias. It’s a wonder why governments in emerging economies continue to sweat over Fed tightening when the market has had ample time to plan around this. The biggest surprise all week was perhaps the weakness in the US dollar heading into the...
read more

Federal budget is not like a household budget

ScreenHunter_5512 Dec. 17 11.08 Cross-posted from The Conversation: Treasurer Joe Hockey is experiencing difficult times. Deteriorating terms of trade and an uncooperative senate mean that he cannot deliver the surplus when he said he would and he cannot continue to cut government expenditure without risking a recession. I have some comforting news for Joe Hockey: the importance of the whole deficit/surplus thing has been greatly exaggerated – with a lot of help from Joe himself of course. The focus on deficits and surpluses distracts us from what’s really important in the macro economy. Hockey and Abbott are very fond...
read more

Happy Xmas Capt’n Glenn: AUD below 82 cents

grumpy cat by Chris Becker Thar she blows! I go away for lunch in the quiet period of the day (all day has been quiet, let's be honest) and the Aussie dollar crumps below 82 cents on the USD, currently at 81.70:     Past 1.53 against euro (EURAUD): Rolling over against Kiwi (AUDNZD), with NZDUSD also selling off but not as dramatically: And a new monthly low in Yen (AUDJPY): Aussie 10 year bond yields are near 3 year lows (chart courtesy of Forexlive) - for mind a place to sell: This seems like market squaring before the FOMC meeting and Yellen press conference...
read more

Why forecasts of a bigger construction boom are wrong

ScreenHunter_01 Mar. 03 22.48 By Leith van Onselen Master Builders Australia (MBA) has forecast bullish growth in Australian new home construction, tipping that dwelling commencements will rise to over 200,000 for the first time in Australia's history in the year to June 2016. From The AFR: Low borrowing costs will fuel accelerate demand in the long-neglected NSW market, pushing the market figure of 194,310 housing starts in the year to June 2015 up to 201,557 in the year to June 2016, the MBA says. “Interest rates will remain low, working to release pent-up demand built up during a decade-long period of underbuilding...
read more

How NSW is driving the domestic economy

ScreenHunter_01 Oct. 04 00.04 By Leith van Onselen Westpac has released its Coast-to-Coast report, which provides an update on Australia's state economies. The report provides some interesting analysis showing that New South Wales is driving demand and consumption nationally on the back of its booming housing market: Economic conditions softened in the September quarter and growth remains uneven. These two points are clear from an analysis of the state economies. Nationally, domestic demand contracted by 0.3% in the quarter and annual growth slowed to 0.9%. NSW was the only state to record an increase in final demand in...
read more

Black gold loses its glitter

ScreenHunter_5444 Dec. 12 10.59 By Peter Schiff, cross-posted from Euro Pacific Capital The stunning 40% drop in the price of oil over the past few months has scrambled global economic forecasts, changed the geo-political landscape, and has severely pressured many energy sector investments. Economists are scratching their heads to determine if the drop is good or bad for the economy or whether cheap oil will add to or decrease unemployment, or complicate the global effort to "defeat" deflation. While all of these issues merit detailed discussions, the first question to address is if the steep drop is here to stay and whether...
read more
Page 1 of 76412345...102030...Last »