Economics

The recent removal of the Speaker of the U.S. House of Representatives, Kevin McCarthy, seems to coincide with the outlook of an unsustainable budget deficit and the likelihood the U.S. Federal Debt to GDP ratio will soon exceed the record reached in 1946, immediately after the second World War. continue…

by David Buckland Posted in Economics, Global markets, Market commentary.

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The economic outlook both in Australia and abroad remains complex, with the lags from material monetary policy tightening proving to be longer than expected. The U.S. economy is showing remarkable resilience, with the consumer benefiting from savings buffers, fixed rate mortgages and rising real wages. 

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by Roger Montgomery Posted in Economics, Market commentary.

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I have a great deal of respect for the team that has been assembled at Barrenjoey, and I have every confidence they will add enormous value to investors through their insights and contribution to the ongoing conversation about the economy and markets. Barrenjoey recently penned a note revealing their outlook for economies and markets, and it’s safe to say, it isn’t the consensus view, which makes it particularly compelling reading. continue…

by Roger Montgomery Posted in Economics, Market commentary, Stocks We Like.

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With forecasters failing to predict the acceleration of inflation from 2021, and its subsequent persistence, it is unsurprising that the U.S. ten-year treasury bonds now exceeds 4.4 per cent, the highest yield recorded in 16 years. continue…

by David Buckland Posted in Economics, Market commentary.

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In this week’s video insight, I review the question of whether a recession is imminent. There has been no shortage of talks of a recession lately, although if we dive deeper into what we have seen in markets over August and September a compelling counterpoint to this narrative is visible. continue…

by Roger Montgomery Posted in Economics, Market commentary, Video Insights.

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I have long ignored the reported vicissitudes of China’s economy, unable to reconcile the fact their gross domestic product (GDP) data – obtained from an impossibly large and disparate country – is released more quickly at the end of each month than the U.S. and the data is rarely, if ever, subsequently amended or adjusted. They get it right the first time, every time. A quick look at the piles of junked Chinese products at the local waste disposal centre quickly disabuses one of any belief in China’s systems producing data that is right the first time every time. continue…

by Roger Montgomery Posted in Economics, Editor's Pick, Global markets.

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Recently, our small-cap team listened to Barrenjoey Capital’s chief economist, Jo Masters, discuss the prospects for the Australian economy. In brief, Masters forecasts the economy to slow rapidly and unemployment to rise to five per cent, with a recession the most probable outcome.  She also foresees persistent inflation, which will force the RBA to hold interest rates at the current level until May 2024.  If she’s right, investors are in for interesting times ahead. continue…

by Roger Montgomery Posted in Economics, Market commentary.

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Many commentators point to the twelve months to December 2022 as being one of the toughest annual periods for the performance of the share market and the bond market for several decades. This was led by the severe sell-off in Government Bonds, aggressive tightening of most Central Banks’ official cash rate and the 33.1 per cent decline in the US-tech heavy Nasdaq Index.  continue…

by David Buckland Posted in Economics, Market commentary.

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On Friday at Jackson Hole in the U.S., Federal Reserve Chairman, Jerome Powell, spoke for eight minutes and 38 seconds reinforcing the idea that restrictive monetary policy is likely to be maintained for some time – all in the name of fighting inflation. World markets quickly went into reverse. The good news is that savvy investors may now get another chance to buy quality businesses at attractive prices. continue…

by Roger Montgomery Posted in Economics, Market commentary.

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Australia is currently enjoying the most buoyant labour market conditions since the 1970s. But how long can the low unemployment rate persist? As the saying goes, if something can’t go on forever, sooner or later it must stop. And with consumer and business sentiment both waning, surely it is just a matter of time. continue…

by Stuart Jackson Posted in Economics, Market commentary.

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