Economics

Both sides of politics and most businesses are obsessed with a “big Australia”. Dick Smith is one of the few on the opposing side of the narrative. And as the Minns NSW Government usurps local councils’ planning powers by announcing their support for residential property located within 400 metres of a train station to be turned into 8–storey apartment blocks and within 800 metres of a train station to be turned into 6–storey apartment blocks, infrastructure will inevitably be left behind, and many streets will become a carpark. More public golf courses will likely be stolen in the name of green space.  continue…

by David Buckland Posted in Economics, Property.

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In this week’s video insight, I explore the challenging dynamics of the Victorian rental market – a pressing issue that uniquely impacts both renters and investors. Amid a nationwide rental crisis, Victoria stands out due to its plummeting rental vacancy rates and the surprising exodus of investors from the market. Despite what seems like a prime scenario for property investors, with demand high and supply low, why are many opting to leave? I delve into the reasons behind the investor retreat, explore the economic forces at play, including significant tax increases and the broader implications of these changes.   continue…

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

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Recent data from the Reserve Bank of Australia (RBA) on the Australian non-bank financing sector alluded to the fact that businesses are continuing to turn to non-bank providers for funding. As evidenced in the graph below, the non-bank share of business credit is trending upwards. Businesses are actively turning to non-bank lenders for bespoke lending solutions and quicker access to capital, in order to maintain momentum and assist with achieving growth. The banking sector continues to be the dominant lender within the residential mortgage-backed securities (RMBS) market, as the capital requirements enforced by the regulatory framework have favoured this style of lending for the banks. continue…

by Brett Craig Posted in Aura Group, Economics.

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Kids are regularly disappointed – often vocally – when they don’t receive what they want. When those kids become investors, the tantrums they throw can be seen in market reactions to their disappointments. And many investors, forecasters and commentators are predicting a tantrum amid changing expectations for rate cuts in 2024. continue…

by Roger Montgomery Posted in Economics, Market Valuation.

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The chorus of investors who believe the market is due for a correction is growing louder, and the list of reasons is growing longer.

I have some sympathy with the view the market could pull back. I believe there is an ever-present risk of such pullbacks, so if one should emerge, it would not be surprising. Additionally, I have no belief in anyone’s ability to forecast the precise timing of such a pullback consistently, so now could be as good a time as any. continue…

by Roger Montgomery Posted in Economics, In the Press.

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In this week’s video insight, David Buckland explores the U.S. budget deficit, steadfast U.S. interest rates, and surging gold prices. As the deficit surpasses projections and interest rates remain high, investors eye the soaring gold market. David delves into the performance of gold-focused companies like Gold Road Resources (ASX:GOR), Ramelius Resources (ASX:RMS), and RED 5 (ASX:RED), predicting a shifting landscape as the appeal of the U.S. Dollar wanes.  continue…

by David Buckland Posted in Economics, Video Insights.

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The frequency of calls that the market is in a euphoric bubble is increasing. It’s worth exploring some of the evidence used to reach that conclusion before deciding whether now is the time to adopt a more cautious stance and to ready oneself for the benefits lower prices deliver.   continue…

by Roger Montgomery Posted in Economics.

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The monthly household spending indicator released by the Australian Bureau of Statistics (ABS) last week, is an additional data point crucial to the Reserve Bank of Australia’s (RBA’s) ongoing monitoring and decision making. Household spending was 3.6 per cent higher than this time last year. This follows a slight dip we saw in December 2023. The ABS reported a 1.2 per cent increase in December 2023 and 2.9 per cent increase in January 2024.   continue…

by Brett Craig Posted in Aura Group, Economics.

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In this week’s video insight, I explore the equity market’s outlook, stressing the balance between disinflation and positive growth against the backdrop of potential inflation and economic slowdowns. Market dips, while concerning, are seen as opportunities, especially in smaller companies, provided inflation or recession risks don’t materialize. I highlight the significant role of the U.S. Federal Reserve and central banks in shaping expectations through interest rate policies. Recent shifts in market sentiment, driven by economic data and Fed caution, illustrate the challenge of forecasting amidst these uncertainties. continue…

by Roger Montgomery Posted in Economics, Video Insights.

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The S&P500 is up 10 per cent in the first quarter of calendar 2024. Another useless fact is that the S&P 500’s rally set 22 new records in 2024 alone, and its market value has grown by over U.S.$9 trillion since late October. 

It’s worth reflecting on our prediction from last year that innovative growth stocks would outperform mega-cap tech stocks in 2024 as investors broadened their risk appetite to include small caps.  continue…

by Roger Montgomery Posted in Companies, Economics.

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