Economics

The 13-interest rate increases by the Reserve Bank of Australia (RBA) in the 18 months to November 2023, combined with the bounce in inflationary expectations is starting to bite. Any company associated with discretionary expenditure missing its guidance from the slowing economic environment and cost-of-living pressures is being brutally dealt with by the share market.   continue…

by David Buckland Posted in Economics.

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In this week’s interview with Paul Turton on ABC Newcastle radio, we discussed several key financial trends and their global impacts. We covered the significant growth of the S&P 500 over the last four years, driven largely by technology stocks and the artificial intelligence revolution. We also delved into the current economic climate in Australia, examining the rising inflation and consumer price index (CPI), and how these factors are influencing discretionary spending and mortgage interest rates. Additionally, we explored the dynamics of the Chinese economy, focusing on the implications of Australia’s coal and iron ore exports to China.  continue…

by David Buckland Posted in Economics, Editor's Pick, Radio.

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With the U.S. official cash rate remaining in the 5.25 per cent to 5.50 per cent range and the U.S. consumer price index rising at an annual pace of 3.3 per cent in May, it appears the U.S. Federal Reserve (Fed) will be sitting on their hands over the foreseeable future as they wait for the rate of inflation to decelerate sustainably toward two per cent. continue…

by David Buckland Posted in Economics.

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I think it’s fair to say anyone with a mortgage or business loan would like to see some relief at the Reserve Bank of Australia (RBA) bowser. While rate cuts benefit those with loans, with real estate, and mortgages, rate cuts could push real estate prices up, further hindering those who are already validly complaining about affordability.  continue…

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

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The restaurant and cafe segment of the hospitality industry holds some sway with government, with its 110,000 venues generating $64 billion in annual revenue. Additionally, it is one of the country’s largest employers of young people. With tougher trading conditions, increasing rents and costs of inputs, the sector is facing unprecedented challenges.  continue…

by David Buckland Posted in Economics, Editor's Pick.

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The monthly consumer price index (CPI) indicator released last week reported a 3.6 per cent increase in the 12 months to April. This follows the 3.5 per cent increase reported in March. We have seen relative stability in the rate of inflation since December 2023, albeit with slight upticks reported in the past two months. This data will be a key point for discussion at the Reserve Bank of Australia’s (RBA’s) next meeting on the 17^th of June. continue…

by Brett Craig Posted in Aura Group, Economics.

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Australia’s annual inflation rate edged up to 3.6 per cent in April, and this included food price inflation of 3.8 per cent. And according to the U.S. Bureau of Labor Statistics, energy and food represents 7 per cent and 13 per cent, respectively, of the U.S. consumer price index (CPI), whilst commodities represent close to 36 per cent. That said, central banks in setting monetary policy, generally place less emphasis on the price changes of these more volatile inputs.  continue…

by David Buckland Posted in Economics.

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Baby boomers won the genetic lottery in so many ways, not just because a whole chicken in 1973 was $1.09 (Figure 1).  

Take Wayne, for example, born in Sydney in 1945 after World War II. As a teenager, he lands a job earning the national award wage of £13.80 per week. He changes his mind after a couple of years and decides to study engineering. University is free (no HECS), so he continued to work part-time while at university and became an engineer in 1965, earning the average wage of £1,145 per year.    continue…

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

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For almost a decade, I have described Australian residential property owners as a “protected species”; Whether we look at the banks, the banking system in its entirety, regulators, including the Australia Prudential Regulation Authority (APRA), the government and even individual politicians – many of whom own multiple residential investment properties – nobody wants to see property prices fall.  continue…

by Roger Montgomery Posted in Economics, Property.

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As you have probably garnered by now, I am optimistic about the prospects for equity markets for the remainder of 2024 and for all of 2025. I believe a process of risk adoption is underway, reversing the conservative stance that dominated sentiment in 2022 and most of 2023 amid fears of rising interest rates and recession. With the subsequent side-stepping of recession along with the acceptance that rates have probably peaked, and with slow deflation continuing, investor appetite for risk can begin to improve.   continue…

by Roger Montgomery Posted in Economics.

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