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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Should we be in a recession already?
Roger Montgomery
June 2, 2023
We have been optimistic about the prospects for equities this year despite fears of recession. And even though investors have listed a deeply inverted U.S. Treasury yield curve, a sharp drop in the oil price, falling consumer demand, credit tightening and declining M2 money supply as reasons to justify expectations of a recession, the outcome is not guaranteed. continue…
by Roger Montgomery Posted in Editor's Pick, Market commentary.
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Will small caps outperform again?
Roger Montgomery
May 19, 2023
The following chart pack reveals the material underperformance of U.S. and global small companies against their larger-capitalisation peers. The relative performances are displayed over the last twelve months and the 2023 calendar year to date (YTD). continue…
by Roger Montgomery Posted in Global markets, Market commentary.
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Why the right investment framework is important
Roger Montgomery
May 16, 2023
We recently published a blog post I wrote entitled, ‘Why I think tech and small caps could rally this year’. In that post I explained the unreasonableness of the interest rate market’s expectations of more than three rate cuts by the end of January 2024. continue…
by Roger Montgomery Posted in Market commentary.
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Why I think tech and small caps could rally this year
Roger Montgomery
May 10, 2023
With inflation finally coming down, it looks like the U.S. Fed Reserve could soon stop lifting interest rates and start cutting, possibly as early as this year. That’s great news for equity markets, which tend to rally when rates are lower. And it’s particularly good news for technology stocks and small caps. continue…
by Roger Montgomery Posted in Editor's Pick, Global markets, Market commentary.
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Barrenjoey issues its economic outlook – and it’s all a bit grim
Roger Montgomery
April 24, 2023
Recently, our small-cap team listened to Barrenjoey Capital’s chief economist, Jo Masters, discuss the prospects for the Australian economy. In brief, Masters forecasts the economy to slow rapidly and unemployment to rise to five per cent, with a recession the most probable outcome. She also foresees persistent inflation, which will force the RBA to hold interest rates at the current level until May 2024. If she’s right, investors are in for interesting times ahead. continue…
by Roger Montgomery Posted in Economics, Market commentary.
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