Market commentary
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What will roar when the USD eventually reverses?
Roger Montgomery
October 20, 2022
There is no question, as a consequence of the pandemic central banks employed radical unconventional monetary policy, alongside equally radical fiscal policy. In an ideal world, there would be no consequences, however every action must have a reaction. The reaction, with a substantial lag, of course, is inflation. continue…
by Roger Montgomery Posted in Global markets, Market commentary.
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Rising rates are crimping US and Aussie spending power
Roger Montgomery
October 18, 2022
Rising interest rates in Australia and the U.S. are having a profound effect on discretionary spending and housing markets. In Australia, they’re also adding to mortgage stress. According to Roy Morgan research, 942,000 Australians are experiencing mortgage stress, and that figure will rise if rates keep heading north. The good news for investors is that equity markets usually bottom when the times are at their toughest. continue…
by Roger Montgomery Posted in Market commentary.
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Are inflationary pressures heading in the right direction?
David Buckland
October 17, 2022
On the back of exiting the COVID-19 pandemic and the Russia-Ukraine war, inflation has been rearing its ugly head and in the case of many developed economies it is growing at the highest level since September 1981, when U.S. ten-year Government bonds yields challenged 16 per cent. continue…
by David Buckland Posted in Market commentary.
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Why it might be time to be greedy once more
Roger Montgomery
October 12, 2022
Currently, price-to-earnings ratios are at levels unseen since the 2020 COVID sell-off and the Global Financial Crisis. Many quality companies are now ‘on sale’. This is creating an ideal environment for judicious investors to take advantage of mis-priced businesses. continue…
by Roger Montgomery Posted in Market commentary.
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Why I think inflation is heading in the right direction
Roger Montgomery
October 12, 2022
With stocks on the rocks, everyone I bump into understandably wants to know if it’s a good time to buy equities – the lure of buying at the bottom is just too great for many to resist. Of course, I don’t have a crystal ball, but there are signs that inflation is heading in the right direction. And, if central banks stop hiking rates, then I think conditions could be ripe for the market to rebound. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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What New Zealand’s rate tightening cycle tells us
David Buckland
October 11, 2022
The Reserve Bank of New Zealand was the first English-speaking Central Bank out of the blocks in their tightening cycle. Commencing in October 2021, the RBNZ has increased its official cash rate on eight separate occasions to 3.50 per cent. Here are my observations on the impacts. continue…
by David Buckland Posted in Market commentary.
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Three scenarios that could kickstart a new bull market
Roger Montgomery
October 10, 2022
As you’ve no doubt noticed, the world’s market commentators, brokers and analysts have turned decidedly bearish. And they have good reason to be pessimistic. But this bear market will eventually end, to be followed by the next bull market. To my mind, there are three distinct economic scenarios that could kickstart the next upswing. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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The tightening interest rate cycle is now biting
David Buckland
October 6, 2022
With the exception of the Reserve Bank of New Zealand, which commenced its monetary policy tightening cycle in October 2021, well ahead of their English-speaking counterparts – the other major English-speaking Central Banks have tried to play “catch-up football” in recent months to counter the multi-decade growth in inflationary expectations. continue…
by David Buckland Posted in Market commentary.
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Focus on inflation if you want to profit from market volatility
Roger Montgomery
September 28, 2022
Global markets are clearly spooked by the U.S. Federal Reserve pushing up interest rates in order to rein in inflation. But fear not. Because inflation is always followed by disinflation. And research shows that shares do very well in a disinflationary environment. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Why the risk-reward ratio is looking good for quality small caps
Roger Montgomery
September 23, 2022
Since January, world markets have been selling off. As a result, a number of quality small cap businesses are now trading at very attractive multiples. Is now a good time to invest in quality small caps? continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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