As noted last week, CBA is not a growth stock. It barely qualifies as a cyclical. Yet, here it is now trading on 22x times forward earnings, nearly double its historic average: It now sports nearly a 50% premium to its peers against which its differences are cosmetic at best. Now, I don’t want to
As we know, I triggered about a $30 rally in iron ore prices in the past week when I reminded the market that Vale was facing another possible dam bust and crisis (or it was thew wind). The news today is that that crisis ie easing swiftly: Brazilian regulators have inspected the Xingdu damn and
The last time I wrote on FriendlyJordies was to give him a whipping for getting into bed with Labor and Kevin Rudd. This serves only to dim his political flame-thrower. But the recent material produced on NSW political corruption has been superb. There are three points to make on this. First, watch it and see
Indeed economist Callam Pickering has updated his Australian job postings series, which tracks the level of job postings since the beginning of the pandemic. According to Pickering, Australian job postings are tracking were tracking 45.5% higher than their pre-pandemic level as at 11 June; although the level of postings has stabilised: Despite Victoria’s latest hard
The ferrous complex was weak on June 16, 2021 as spot, paper and steel all fell: There was a pretty nasty combination of factors. First this: The State-owned Assets Supervision and Administration Commission has ordered state-owned enterprises to control risks and limit their exposure to overseas commodities markets, according to people with knowledge of the
China has released its May data and the news is boom! Not. The data is so distorted by COVD base effects that it’s still very difficult to read. Simple year-on-year and year-to-date comparisons looks outrageously good. Year-to-date growth to the end of May is 17.8% for industrial production, 25.7% for fixed asset investment and 15.4%
A seismic shift in risk markets overnight with the US Federal Reserve moving its so-called dot plot into the affirmative for more rate hikes, sooner than expected. This spooked Wall Street and saw the USD soar against all the major currencies, plus wiping out gold prices. Bond markets saw a big increase overall in yields
Policy error time. The Fed has blinked and the Australian dollar just broke. Don’t cheer too loudly. My risk case for a decent market correction just firmed up. DXY blasted higher: Australian dollar was pulverised and the giant head and shoulders top is back in play: Gold was poleaxed. Oil held up but all commodities
For months we have witnessed Australia’s employer groups lobby the federal government for easier access to foreign workers due to purported crippling labour shortages. However, when it comes to actually paying more to attract Australian workers into their respective industries, they are firmly opposed. In the lead-up to yesterday afternoon’s minimum wage decision by the
The Australian property market continues to rebound hard out of the COVID-19 pandemic. Following a 2.6% decline in dwelling values across the five major capital city markets between 15 March (the unofficial start of the pandemic) and 13 October 2020 (the bottom), values have since risen by 13.1% across the combined five major capital city
Global Macro / Markets / Investing: The Fed Cannot Control Its Easy-Money Monster – NY Times World’s Bubbliest Housing Markets Flash 2008 Style Warnings – Bloomberg Stability of collusion and quality differentiation: a Nash bargaining approach – Bruegel Nobel Prize winning economist Muhammad Yunus says 2050 may be too late to save planet. – Yahoo
The market is oscillating between value and growth months. In May it was the turn of value portfolios (including ours) to outperform. Our direct equity portfolios beat benchmarks by over 1% on the month and our tactical asset portfolios finished up between 1% and 2.7%. We have, however, called time on the value trade. The
Asian share markets are mixed again with Chinese bourses continuing to fall, with Japanese stocks joining in while local issues are unchanged. The USD continues to strengthen against the major currencies as volatility drops going into tonight’s Federal Reserve meeting. Gold is trying to lift off the floor after selling off overnight and is slowly
The ABC has published another story touting tiny houses as “one way young people can afford real estate”: For Lucy and Jonty, the cost of their tiny house was around $120,000, including solar panels. That compares to the median Hobart dwelling value of $574,543, according to CoreLogic figures from May… It means they’re now committed
In March two key reforms came into effect designed to take the steam out of New Zealand’s fast inflating property market. First, the Reserve Bank of New Zealand (RBNZ) reintroduced loan-to-value ratio (LVR) mortgage restrictions, which from 1 March 2021 required both investors and owner-occupiers to hold bigger deposits: Second, and more importantly, the New Zealand
The Australian Bureau of Statistics (ABS) has released Overseas Arrivals and Departures data for April 2021, which confirmed that net migration into Australia remains negative. There were 23,290 net permanent & long-term departures in the 13 months since the beginning of the pandemic in March 2020, representing the first time that net arrivals have been
The contract to build Australia’s new submarine fleet is expected to be on the agenda when Prime Minister Scott Morrison holds talks with French President Emmanuel Macron in Paris. Independent senator Rex Patrick – who served 11 years as a navy submariner and worked in the defence industry for two decades – has called for
The introduction of the trans-Tasman travel bubble on 18 April 2021 has boosted international travel, according to new provisional travel statistics from the ABS. Arrivals of non-Australian citizens doubled in May to 71,060 from 35,210 in April: This was driven by a 32,000 increase in arrivals from New Zealand: In a similar vein, departures of
The Bear Traps report goes full inflation. The few missing facts include that it was Republicans that ravaged the US budget, no mention of China, no reference to vast deflationary forces. This is Australian extremism not analysis. Ironically, this contrarian is a great contrarian signal. Sell metals! In 1787, with remarkable foresight, Scottish historian Alexander
By Gareth Aird, head of Australian economics at CBA Key Points The ABS monthly labour force survey excludes overseas residents in Australia and therefore the survey has not accurately captured the impact of the international border closure on the labour market. The ABS quarterly labour account includes all people who contribute to Australian economic activity
ANZ-Roy Morgan Australian Consumer Confidence increased 0.3% last week as Melbourne’s 2-week lockdown came to an end, although restrictions such as masks in public places and on travel and gatherings remain. #ausecon #ausretail @arindam_chky @DavidPlank12 @roymorganonline pic.twitter.com/BgIde4If0X — ANZ_Research (@ANZ_Research) June 15, 2021
SQM Research has released its rental vacancy report for May, which reports a national rental vacancy rate of only 1.8% – the lowest level of vacancies since October 2012. Rental vacancies are zipped tight everywhere except Melbourne and Sydney, which have been hit hardest by the loss of international students, as illustrated clearly in the
Westpac with the note: • The six-month annualised growth rate in the WestpacMelbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, eased from 2.86% in April to 1.47% in May. The growth rate in the Leading Index has normalised significantly over the
The OECD has blamed Australia’s restrictive planning and zoning for driving the fourth sharpest property price increase in the developed world over the past 20 years: Paris-based OECD director of policy studies in the economics department, Luiz de Mello, said low interest rates had contributed to rising house prices. But restrictive regulations were also a
As expected, China continues its systemic push towards tighter credit and economic restructuring away from construction. This time it’s wealth management products, an old favourite for developers to raise cash: Highly rated WMP will be prevented from buying junk debt from developers. This addresses the underlying duration mismatch. $400bn in junk debt will need to
In March the federal government released a 327-page report from the National Agricultural Labour Advisory Committee, which explicitly admitted that the agricultural industry’s overreliance on cheap migrant labour is bad for productivity and unsustainable: Australia’s main competitors in agriculture are either ahead or running very close. In many ways, Australia is at a crossroads. Either its
The ferrous complex held on June 15, 2021 as many other commodities rolled into the big plunge. Spot was stable, paper up a bit, steel down: Steel was actually down yesterday but I didn’t have prices for a few days. The news is another accident, this time in China where more supply has come off
Forex last night was a reflection of weakening US data, fading inflation and diving commodities. DXY was firm as was EUR: Australian dollar was hit on all major DM crosses: Oil is to the moon on strong US inventory draws. Gold is caput: Base metals were hammered: Big miners too: EMs stocks were hit: Junk
Mixed economic news overnight from the US saw Wall Street wobble and turn away from yet another record session high with the latest retail sales much weaker than expected. Currency markets were mixed although Pound Sterling and Aussie dollar fell back against USD while Euro was contained yet again. Bond markets saw a slight increase
Labor knows well the power of mining. The Rudd Government was rolled when it tried to tax it. Now Labor is seeking to mobilise the same power to its own service, and that of Beijing. A few weeks ago, the leader of the opposition, Anthony Albanese blew a loud dog whistle to Australian mining. Actually,
