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David discusses four major factors which could be causing the low rate environment we currently find ourselves in. Watch here

Market commentary

Observations of equity markets from pervious viral outbreaks

Scott Phillips

January 28, 2020
Investors in Australia and around the world are understandably worried about the onset of a new disease (Wuhan Coronavirus – known as nCoV) and the implications for their investments, particularly as the medical profession develops their understanding of the disease. While the number of confirmed cases has increased from 282 to 4,474 in the past 7 days it is a moving tally. continue…

by Scott Phillips Posted in Global markets, Health Care, Market commentary

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POSTED IN Global markets, Health Care, Market commentary
Have low interest rates made risk assets too expensive?

Roger Montgomery

January 24, 2020
Around the world, plunging interest rates have led to a stampede by investors into risk assets, like shares and property. With the prices of these assets now looking quite inflated, investors need to do more research than ever to find under-valued assets. continue…

by Roger Montgomery Posted in Market commentary

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What really propelled the Aussie market in 2019?

Andreas Lundberg

January 20, 2020
Over the past 12 months, the soaring Australian share market has made most local investors feel pretty smart. However, for most part, it was falling interest rates, rather than rising company earnings, that kept the rally going. The question now is: how much longer can this bull market go? continue…

by Andreas Lundberg Posted in Market commentary, Market Valuation

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When unconventional policy becomes the convention

Andrew Macken

January 15, 2020
In the first days of the new calendar year, as the world braced itself for a potential war in Iran, Ben Bernanke, the former Chair of the Federal Reserve, gave a speech to the American Economic Association in San Diego. The topic? “The new tools of monetary policy”. continue…

by Andrew Macken Posted in Global markets, Market commentary

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Farewell 2019, Hello 2020

David Buckland

January 2, 2020
After recording an excellent performance in the June 2019 half-year, both the US Nasdaq and S&P 500 led the way in the December 2019 half-year with a return of 12.1 per cent and 9.8 per cent, respectively, for a return over calendar 2019 of 35.2 per cent (US Nasdaq) and 28.9 per cent (S&P 500). And this excludes dividends. continue…

by David Buckland Posted in Economics, Market commentary

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WHITEPAPERS

FINDING ATTRACTIVE RETURNS IN A LOW RATE ENVIRONMENT

There is a strong case for interest rates remaining structurally lower for a protracted period of time. In our Part II Whitepaper, we consider the consequences on asset prices – in particular on equity prices. We believe the equity market offers investors attractive risk-adjusted returns on average and that equity risk is being priced differently between certain geographies and sectors. This raises the prospect of attractive opportunities ahead.
download the whitepaper
The market’s expensive, right?

Andrew Macken

December 17, 2019
Finance theory teaches that when you invest in a firm, your expected percentage annual return is some spread over and above the risk-free interest rate (typically viewed as the annual yield on a government bond). The size of this “spread” is proportional to the risk that you bear. continue…

by Andrew Macken Posted in Global markets, Market commentary

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2019 – the year in review

Joseph Kim

December 16, 2019
With the year coming to a close, I thought it would be interesting to look at 2019 in terms of some of the movements we saw in the ASX300 and its constituents. continue…

by Joseph Kim Posted in Editor's Pick, Market commentary

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Are we seeing a dissonance between credit markets & broader equity indices?

Roger Montgomery

December 12, 2019
UK Macroeconomic Strategist Michael Wilson has penned an interesting piece entitled “Involution” which came across my desk. It was interesting enough that I thought it worth sharing in its entirety. continue…

by Roger Montgomery Posted in Global markets, Market commentary

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US equities will head higher in 2020, says Credit Suisse

David Buckland

December 5, 2019
Our friends at Credit Suisse have fished out the crystal ball to give us a snapshot of the likely year ahead for US equities. The good news is that next year should deliver more solid returns for investors. continue…

by David Buckland Posted in Global markets, Market commentary

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Meat producers are headed for beefier profits

Roger Montgomery

November 24, 2019
A combination of booming protein consumption in China, drought in Australia and African swine fever is sending meat prices sky high. That’s great news if you’re a producer. But not so good if you’re a meat eater. To paraphrase former PM, Malcolm Turnbull, there’s never been a better time to be a vegetarian. continue…

by Roger Montgomery Posted in Market commentary

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