Market commentary
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Are we headed for another AI winter?
Roger Montgomery
July 21, 2023
I remember the 1999 tech boom like it was yesterday. I was at Merrill Lynch and the average first-day premium for a Nasdaq IPO was 90 per cent! What stood out was investors’ predilection for anything with a ‘.com’ attached to it. Plenty of companies, even junior mining explorers, whacked a .com on the tail of their changed name and watched their valuations surge. Today, I’m seeing the same trend with artificial intelligence (AI). continue…
by Roger Montgomery Posted in Market commentary.
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Why you should ignore the economic noise
Roger Montgomery
July 20, 2023
Right now, I think many investors are spending too much time focusing on whether a recession is imminent and how many more interest rate rises are likely before the Reserve Bank of Australia (RBA) taps out. I think they would be far better off trying to identify quality companies that are winning market share, raising prices and margins, and expanding into new regions. And there are plenty of those. continue…
by Roger Montgomery Posted in Market commentary.
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Farewell fiscal 2023, hello fiscal 2024
David Buckland
July 10, 2023
The period from late 2021 into much of 2022 saw strong rising official cash rates and widespread worries about an upcoming recession, equities mostly surprised by delivering strong performance in the financial year of 2023. Investors demonstrated remarkable resilience and adaptability as they actively pursued opportunities in the market. However, the year also witnessed a slowdown in global industrial production, leading to a weakening of commodity prices. Notably, the oil price experienced a significant decline of 30 per cent throughout FY23. continue…
by David Buckland Posted in Market commentary.
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The best time to invest in small caps is now
Roger Montgomery
June 30, 2023
Fears of recession, a market correction and runaway inflation have caused small-cap stocks to materially underperform their large-cap cousins. Those same fears have led many investors asking how wise it is to invest in a small-cap fund now. But investors should remember the stock market is the only market where consumers zip up their wallets when prices are low. continue…
by Roger Montgomery Posted in Market commentary.
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Good news for equities. Investors can expect higher liquidity
Roger Montgomery
June 28, 2023
Putting value to one side, the price of an asset cannot rise unless investors buy it. And, in order to buy it, they require liquidity. Tracking global liquidity can go some way to explaining, if not predicting, the path of asset prices. continue…
by Roger Montgomery Posted in Global markets, Market commentary.
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Unmasking the ‘mortgage cliff’: Are recession fears overblown?
Roger Montgomery
June 26, 2023
With all the talk of recession, we’ve been exploring its probability. As investors, it’s vital to understand which sectors and individual companies are most and least impacted. And helping in that task is appreciating the consumer’s important canary-in-the-coal-mine role. A consumer’s financial position will ultimately determine their propensity to spend on discretionary items and their ability to meet non-discretionary expenses such as utilities and the mortgage, so it is worth understanding each data point. continue…
by Roger Montgomery Posted in Market commentary.
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Why is the S&P 500 rallying amidst uncertain times?
Roger Montgomery
June 20, 2023
While our predicted 2023 stock market rally appears robust at first glance, the reality reveals a different story. Initially, pessimists expected the aggressive series of interest rate hikes in 2022 to have significant consequences. Consensus the U.S. faces a recession, led many to predict a decline in stock values. However, contrary to these expectations, the U.S. economy has continued to grow, and the S&P 500 Index, which influences global investor sentiment, has risen by over 15.3 per cent this year. continue…
by Roger Montgomery Posted in Editor's Pick, Global markets, Market commentary.
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Some analysts are forecasting big gains for Gold and Bitcoin
Roger Montgomery
June 13, 2023
A theory doing the rounds is that we’ve entered a new epoch where central banks will have no option but to create monetary inflation to fund structural fiscal deficits. To be clear monetary inflation is not the same as consumer price inflation. Monetary inflation is brought about through central bank balance sheet expansion or quantitative easing. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Australian consumers tighten their collective belt
David Buckland
June 6, 2023
There is no shortage of negativity amongst Australians with many commentators predicting an Australian recession. First, there is the transfer from fixed rate mortgages to variable rate mortgages. continue…
by David Buckland Posted in Editor's Pick, Market commentary.
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Macro researchers are Bullish on equities
Roger Montgomery
June 6, 2023
Macroeconomic research house Alpine Macro has recently published an argument that should reassure bullish equity investors. continue…
by Roger Montgomery Posted in Market commentary.
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