I don’t really have too much to say on this as nothing has really changed too significantly…the market is expecting interest rate cuts with an economy influenced by overseas events. The uncertainty in markets remains huge and its difficult to feel bullish on sharemarkets or the global economy and the downside risks clearly remain as nothing is resolved. …
Category Archive: Economy
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Sep 26
Sensational Bearish Interview
Found this via Zero Hedge …sensational interview on the BBC with a trader who believes “Goldman Sachs rules the world” and that “this economic crisis is like a cancer, if you just wait and wait thinking this is going to go away, just like a cancer its going to grow and its gong to be …
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Sep 22
Europe equity markets getting smashed…
…and US futures not looking much better. The Euro Stoxx 50 is down 4.4% at the time of writing; UK, German, French, and Spanish equity markets are all down more than 4.3%. The S&P500 futures are down around 1.5% and Australia’s SPI200 is also down around 1%. Plenty of downside risk yet whilst politicians kick …
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Sep 21
Tonight should be a turning point…either way
With the Federal Open Mark Committee (FOMC) currently meeting, many pundits are expecting a very very big package to be announced by Ben Bernanke tomorrow. If its not what the market expects, then I imagine there’ll be more equity market pain but if it is big, then I’m confident we’ll see a strong market (so …
Sep 16
Australian Government Bond Yield Curve…still dropping
Source: Reserve Bank of Australia I’ve just updated my last yield curve from just over two weeks ago and as the above chart shows yields have dropped another ~40bps since then. This is an indication of the lack of global stability driven out of Europe and US and a resolution to their issues is clearly …
Sep 10
A few thoughts on investment strategy for today
With the US heading towards recession and the Euro Sovereign Crisis getting ugly again where to invest one’s funds has never been tougher. Australian bonds yields are around 4%, meaning they are on PE ratio of 25 which compared to local and global shares, which are currently on forward PEs of around 10, are very …
Sep 07
US 10yr Treasury bonds at record low
Source: Federal Reserve I’ve been a little slow on this, but last Friday US 10 Year Treasur bond funds hit their lowest point on record???, well at least since the start of 1962 which is how far back this Federal Reserve data went. What does it mean? Possibly a few things. Firstly, inflation is a …
Aug 30
Australian Government Bond Yield Curve…bearish look
As the chart above shows it was another great month for bond investors. Over the last 3 months, yields have dropped around 100bps across the curve which for many bond funds (duration of at least 3 years) results in capital growth of at least 3% is addition to the usual income of around 5%pa. This …
Aug 19
Another dodgy market update
Obviously a pretty difficult investment environment at the moment. Markets tanking again overnight and following on in Australia this morning. Watching Billabong drop around 25% this morning demonstrates the benefits of diversification…I’d hate to be an adviser with an overweight Billabong position in my client’s portfolio. Anyway I digress. Volatility in the sharemarkets will continue for many …
Aug 08
So much for the downgrade…it’s all about growth expectations
So the US has just had its first trading day since S&P downgraded US debt to AA. A downgrade in anyone’s debt would normally result in an increase in yields as the debt is viewed as riskier so investors expect a higher yield to be compensated for that risk. What happened in the US overnight …