Central Bank tightening policies have escalated during the past month, and rising interest rates are impacting asset prices. The following chart displays interest rate movements in the US 10 Year Bond over the past 40 years, a long-term downward trend. The US 10 Year Bond Yield is the most actively traded interest rate vehicle in …
Most ASX listed companies reported FY22 numbers during the month, with earnings beating analyst estimated only slightly. However, earnings estimated have been downgraded as a function of softening global growth. ASX reporting season beats vs misses (ASX200) Central bank movements (interest rates) are impacting markets more so than underlying company fundamentals, as witnessed with …
Markets went up 4% in July, following a weak end to the 2022 financial year. Volume in the market has been very low, as investors await reporting season to ascertain the impact of rising labour, energy and funding costs. For the first time in 10 years or more inflation, rising interest rates and how central …
Rising inflation and interest rates globally have impacted markets, with both equity and bond markets dropping to adjust for the rate rise, increasing the return on cash (risk-free rate of return). The ASX is down about 10% for the month (at time of writing). Signs of inflation have been clear for some time, and well …
The month of May provided much to consider. The election result had little bearing on the Australian market, as the key drivers appear to be global macro-driven capital flows as a function of forecast inflation and interest rates. Overall, the market was down -2.5% this month and broadly in-line with global movements. The high growth …
Market volatility continues, as an ever-increasing list of factors are impacting on the global macro (and micro) environment. In addition to inflation, interest rates, the war in Ukraine and lockdowns in China are also impacting key transport logistics and supply / demand dynamics. China is Australia’s largest trading partner, and a significant global power, so …
The market has rallied during the month, as the endless battle between fear and greed continues. On the positive (greed) side, the recent reporting season highlighted very robust company earnings resulting in a record $246 billion sitting in company bank accounts. The dividends being paid during March and April amount to $36 billion, a record. …
The past month has seen most ASX-listed businesses report first half (FY22) numbers, broadly demonstrating strong corporate earnings in nearly every sector. The rate of companies beating expectations is currently at 55%, versus 33% historically. Only 14% of companies have missed analyst forecasts. A particular highlight being the ability of high-quality businesses to pass through …
After a strong start to 2022, markets globally have become volatile with inflation rising above expectations, leading to the potential for earlier interest rate rises. Unprofitable businesses feel the greatest impact of rising interest rates on their valuations, as their cost of funding rises. This is not to say that quality profitable (defensive) businesses will …
The ASX200 index is up about 12% for 2021, or 16% when including dividends and capital returns. Very low interest rates, government spending and improved household savings has resulted in a boom for the economy and asset prices (shares and property in particular). A world-beating vaccination rate and consumer confidence has seen a transition to …
