13

April car sales down 4.5%

Adam Carr won’t be happy. He’s relied on growing car sales in part to rationalise his intense campaign for rate hikes. Westpac has just released a note on the April sales figures from the Federal Chamber of Automotive Industries and it’s into reverse I’m afraid: Westpac Economic update Australia: new vehicle sales down 4.5% in

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46

It begins

It was only a matter of time. UBS let the warning out to investors this morning. Arrears rose alarmingly. Early warning sign for consumers? ANZ’s arrears levels have risen sharply. Since September its >30 days arrears have risen 41% to $5.8b, while >90 days are up 26% to $2b. We believe higher arrears are heavily

13

Australian dollar top is in

On Monday I posted a technical piece saying the the Australian Dollar had hit resistance and so far it appears that the 1.1014 level has proved to be the ceiling that I thought it was going to be. It was tested on two distinctly seperate occasions on Monday Sydney time and then again in New York

2

Trading Day

The S&P/ASX 200 is down almost 1% to 4755 points from a 4971 point high on the 11th April, a 4.3% total loss in the current dip. Momentum and other technical indicators continue to be very negative. The small short-lived Easter rally looks like being the “dead cat bounce” as part of an overall correction

20

Iron fist

The future of Australia’s coal exports look pretty assured. The International Energy Agency is forecasting that the growth between now and 2035 in China’s energy production will equal America’s, Europe’s and Japan’s current energy usage . Despite China’s falling carbon intensity, much of the expansion this will still come from coal. As I noted in

1

Westpac “boring”

WBC released its 2011 Interim Results today. Below is a brief summary of the key figures along with select graphs taken from the broker presentation. Profit Reported Net Profit after Tax (NPAT) was up 14% to $3.961 billion with growth in cash earnings of 8% with all divisions (incl. NZ) experiencing growth. Similarly to ANZ,

16

An awfully bland miracle

The RBA made reference to the likelihood of a negative print when Q1 GDP is released on the first of June so I thought I would visualise what a negative number. Without positive revisions to previous quarters this would take the annual rate below 2%: While we were the only developed nation to avoid a

9

Good and evil in interest rates

According to Peter Martin: The Reserve Bank believes inflation has bottomed and it will soon have to lift interest rates, possibly even next month. The bank’s change of heart emerged during a three-hour board meeting yesterday that resolved to leave the cash rate steady at 4.75per cent but to be prepared to lift it without

5

May 4 links: Rate rage

Down: metals,  energy, Aussie Flat: $US, grains Osama victim of Arab revolt. Asia Times Gross backs emerging markets on inflation concern for US. MarketBeat Seems backwards to me… Who pays for Greece? Business Insider China is big. MarketWatch US ISM strong. Calculated Risk But growth is not good. Tim Duy Adani buys coal port. FT RBA will lift. Peter Martin,

49

Strength not weakness is hitting housing

The Unconventional Economist posted on the bearish musings of Louis Christopher overnight. Mr Christopher’s thoughts looks fine and good, but made little sense to me. Here is the quote: I still do not believe this is going to be the big one- that being the big 40% house price crash. However for many vendors, it’s

24

What’s that hissing sound?

In today’s SQM Research weekly newsletter, SQM’s Managing Director, Louis Christopher, provides a sobering assessment of the state of Australia’s housing market. Below are the key extracts, together with some charts and data added for additional context. “The housing market’s downturn is now happening at pace and there is no imminent recovery in sight. These

8

Australian dollar to retrace on rates

This is how I reckon the currency guys might take the RBA’s no move announcement. It may be different to my fellow bloggers or the economists but then again currencies are traded by different people. The release of the RBA’s Board Meeting Communique had something in it for every one: A nod to the mining

8

RBA holds, options open

The RBA has pretty much delivered market expectations with a hold and more hawkish statement. However, this is not as hawkish as I might have expected, with a strong nod toward both tradable goods sectors and housing. Options look open for next month. The debate will rage! Statement by Glenn Stevens, Governor: Monetary Policy Decision

0

Trading Day

The S&P/ASX 200 is down over 1%, or 51 points at 4773 at 1pm AEST, below support at 4800 points. Momentum and other technical indicators are very negative as this broad selloff continues to hit all sectors. Three consecutive closes below the 15 day moving average are indicative of a correction pattern, but medium term

4

ANZ half-year update

ANZ released its first-half update today.  Below is a brief summary of some of the key figures along with graphs taken from the presentation. Profit Up 23% compared to 1HY10 results, however revenue is down whilst expenses are up.  It seems a 40% reduction in provisions for the same period has contributed the lions share

3

Bull and bear

One of the more entertaining aspects of market commentary is how superficially plausible diametrically opposite views often can be. Being a bear by temperament, I am inclined to think the market is looking very vulnerable, especially industrials. The impact of the high $A has to have some negative effect on the the non-mining industry base,

9

Is al-Qaeda still a risk?

Following is an excellent assessment of the current and future path for al-Qaeda from Jamestown, a world-leading international relations website. How Important is Bin Laden Anyway? Bin Laden is not a religious scholar; he is not a military planner; he is not even a politician. He will, however, always be the man who brought down

19

The silver highway to regulatory risk

Silver is not probably one of the metals you watch. While we hear about the price of gold all the time Silver is in many ways the poor cousin. But if there was ever going to be a useable metallic standard it would probably be silver rather than gold. This fact has been picked up

18

The bubble formula

What is it that determines house prices? Supply & demand, availability of credit, government subsidies, taxes, or a level of value in the buyers head?  I think it’s time we try to put a little discipline into the debate. Clearly many things go into determining house prices but with a little thought we can perhaps understand

30

Steering Godzilla’s seesaw with a mallet

Something we discuss quite a bit on MacroBusiness is the balancing act that the RBA is attempting in adjusting the economy away from credit driven housing and into resource sector led business investment. We also have many off-line conversations about this topic, mainly focusing on what  could be going wrong and what our own personalities and ideologies lead us to believe is actually

11

May 3 Links: Osama, Silver and the RBA

Silver just went splat, rumours applenty Naked Cap Down: Gold, energy, grains, $US , Aussie US dollar at 3 year low CNBC Greek bonds smell worse again Bloomberg Limited Contagion: Portugal,  Spain, Italy, Belgium Portugal deal coming soon SMH Overnight market analysis Bloomberg US celebrates Bin Laden’s demise BBC Waiting for the back lash Reuters The Aussie angle SMH US, China

29

Unemployment and house prices

Following on from Popping Bubble’s recent post, Australia’s low level of unemployment is often held-up as a reason why home values won’t fall. According to this argument, home values will remain supported as long as people have jobs and can continue meeting their mortgage repayment obligations. For example, in last year’s infamous CBA investor presentation,

4

Commodity boom gets bigger

The RBA has released its monthly commodity index and its up substantially again. Even with the dollar, there is another 3.8 rise for April. Preliminary estimates for April indicate that the index rose by 7.6 per cent (on a monthly average basis) in SDR terms, after rising by 0.8 per cent in March (revised). The

32

Australian dollar hits resistance

If I was forced to trade today and I could only bet on the next 3 cent move, I’d put my money on the Aussie seeing 1.07 before 1.13. This view is based on my view of the technicals, the fact the Aussie feels like a crowded trade and Bloomberg TV seems to want to

0

Trading Day

Midday Summary The market is continuing a broad selloff, as the major constituents across all sectors are down after midday. The ASX200 is down almost 0.75% and is teetering below support at 4800 points. Momentum and other technical indicators are negative but not conclusive of a broad correction as this is likely to be a

11

Ray of light for manufacturing?

Today AIG PMI  shows manufacturing still in recession in April. However, there is a the hint of a trend change in both the the headline index and its internal measures. It is slow progress and nobody should be breaking out the champagne, expecially since the dollar has not stopped rising but there is slow progress towards expansion.

6

Broad based house price falls

Find above a snap shot of the ABS eight city house price index released today. Relative to Rismark, falls are a slower than in Brisbane and Perth but much more widespread, and larger in Melbourne and Sydney. Here is a graph of the eight cities since 2002, It is a long way up to the

1

Desperately seeking growth stocks

The stock market is developing a bearish character. The impact of the high Australian dollar is being felt on earnings prospects and the weakening housing market is entrenching the two speed economy. Defensive strategies are being dusted off. But given that the options are not especially attractive elsewhere, one possible defensive strategy is to do

2

TD punctures inflation panic

It is funny how one number can change peoples perceptions. Last week we saw the CPI and the fact that pretty much no-one expected it means that analysts and journos want to talk about and give it more credence than if it had of been inside their range. I believe it’s a form of mental

29

Take a chill pill

My kingdom for a rational media. Today’s selection of economic commentary, from interest rates to the Budget and carbon taxes is so full of amphetamines that one is tempted to conclude that everyone is still high from last night’s Logies. From the top, we have a piece from Alan Kohler that makes no economic sense: