There are plenty of important economic releases due in the US this week, with the August jobs report and July PCE inflation figures of most interest. China's latest PMIs will be a focal point, while unemployment releases are due across Europe. Here in New Zealand, the ANZ Business Outlook survey will be the key economic releases on Thursday and the earnings season will continue as well. Meridian Energy and Tourism Holdings are two of the likely highlights, while investors will be watching for an...
Aug 26, 2023•21 min
After a stellar first seven months of the year, August is proving to be more challenging for investors. US shares are down about four per cent this month, which puts it on track to be the weakest month since December last year. What's brought on this sudden bout of August anxiety, and what might the near-term hold for investors?
Aug 23, 2023•21 min
There's an awful lot happening across financial markets at the moment. US shares have fallen for three weeks in a row, while 10-year Treasury yields are close to the highest levels since 2007. China has found itself in a challenging situation with weak domestic demand, fears of deflation, a troubled housing market and concerns over the shadow lending sector. New Zealand farmers are feeling the brunt of this, with Fonterra cutting its milk payout forecast for the second time in a fortnight on Fri...
Aug 20, 2023•23 min
The Reserve Bank of New Zealand left the Official Cash Rate unchanged at 5.5% today, having increased it at 12 consecutive meetings between October 2021 and May of this year. The forecasts in the associated Monetary Policy Statement reflected a more resilient economy, a labour market that remains tighter for longer, and higher inflation over the next 12 months. What does this mean for investors, and is there a risk interest rates need to go higher?
Aug 16, 2023•13 min
Dairy prices have been trending lower for the past 18 months, and the declines have gathered pace in recent weeks. This will impact the broader economy, flowing through to reduced spending on goods and services, lower activity, and a reduced tax take. It could also put some downward pressure on the currency, given the historic relationship between global dairy prices and the NZ dollar. For investors, this is a timely reminder of the need to hedge our bets with a healthy exposure to international...
Aug 14, 2023•21 min
The US consumer will be in focus this week with retail sales for July out on Tuesday, as well as earnings releases from Home Depot and Walmart. Following a better-than-expected GDP report in the UK on Friday, markets will be watching wage data on Tuesday and the July inflation report on Wednesday. There’ll be plenty to keep an eye on here this week, with the Reserve Bank set to release its latest monetary policy decision on Wednesday, as well as a fresh set of economic projections. The reporting...
Aug 12, 2023•22 min
The reporting season kicks off next week and we can expect a plethora of releases across the NZX. About two thirds of the companies on our market will report earnings through August and September. As always, there will be winners and losers. Some companies will be feeling the pressure of slower economic growth and rising costs, while others will have enjoyed a pleasing return to profitability. The next several weeks will allow us to take the pulse of corporate New Zealand, providing some real-ti...
Aug 08, 2023•22 min
The S&P 500 in the US fell 2.3% last week, its worst performance in almost five months. After a stellar run that’s seen the US market rebound more than 25% from its October 2022 lows, a breather is to be expected. A slightly weaker than expected result from market heavyweight Apple and a softer jobs report that pointed to persistent inflation pressures were catalysts for the more cautious tone. There was a lot going on in the local market too, with some fresh unemployment figures coming out ...
Aug 05, 2023•30 min
August is “Money Month”, an annual public awareness campaign run by Te Ara Ahunga Ora (the Retirement Commission) to help improve financial wellbeing. With that in mind, we thought we’d let aspiring share investors in on a secret, which is that it’s much easier than people think. In fact, if you follow two simple rules it’s hard to go wrong.
Aug 02, 2023•20 min
The S&P 500 in the US rose another 1.0% last week, following more evidence inflation is coming under control and in the wake of more solid earnings releases. Having rallied 28.1% from the lows of last October, the US index is just 4.5% below its peak from January 2022. Last week was action-packed across financial markets, and the next five days are looking extremely busy too. There are some crucial economic releases due out of the US, including the ISM indices and the monthly jobs report, bo...
Jul 29, 2023•28 min
The election is less than three months away, the campaign is heating up and political experts are speculating on what the makeup of our next government will be. For the economy, uncertainty always prevails as an election approaches. Businesses tend to sit on their hands, refraining from making any major decisions while the policy backdrop is up in the air. However, once they’re out of the way most firms simply get on with things, rather than letting the political landscape derail their plans. We...
Jul 25, 2023•25 min
World sharemarkets remained in an upbeat mood last week, with the S&P 500 in the US rising another 0.7%. The Dow Jones Industrial Average is up ten days in a row, its best winning streak since 2017. Looking ahead, a very busy five days loom, with flash PMIs set to take the pulse of global growth on Monday, then three major central bank meetings later in the week. The Federal Reserve and European Central Bank are both expected to raise interest rates by another 0.25% each, while we'll hear fr...
Jul 22, 2023•23 min
If you’re feeling a little confused about where global sharemarkets are headed, you’re not alone. Even the experts are unsure, with the range of predictions for how things will play out from here at the widest in decades. Wall Street forecasters have been caught well and truly off guard this year, with the strength of the US sharemarket taking almost everyone by surprise. What's driving this optimism, and why have the experts been proven wrong so far in 2023?
Jul 18, 2023•21 min
Last week was a very strong one for global sharemarkets, as investors cheered a softer than expected US inflation report that fuelled hopes interest rates will stop rising soon and that a major recession can be avoided. Looking ahead, the local highlight will be the June quarter inflation report here in New Zealand. Due Wednesday, it is hoped this will show a further moderation in prices pressures which will help cement the view we have seen the last Official Cash Rate increase for this cycle. T...
Jul 15, 2023•24 min
The international quarterly reporting season kicked off a few days ago, and over the next few weeks this will be a focal point for share investors. This will be a crucial period for the direction of the sharemarket over the near-term, particularly in the US where much of the strength has come from this year. Despite some risk of earnings disappointment, there are still opportunities to be found. We've seen some stunning gains from a relatively narrow group, while many other parts of the market h...
Jul 12, 2023•14 min
New Zealand's gross domestic product declined in the three months to March 2023, making for the second consecutive quarter of contraction. Since these figures were released last month it’s been widely reported that the New Zealand economy has experienced a recession. Is that really the case though, and was the contraction big enough or the weakness widespread enough for us to consider this a genuine recession?
Jul 11, 2023•14 min
Global sharemarkets took a breather last week, with most falling slightly after a very strong first half of the year. Meanwhile, interest rates pushed higher as investors considered the prospect of more monetary policy tightening in the months ahead. There's plenty to keep an eye on in the days ahead, including a Reserve Bank decision here in New Zealand, an important inflation report in the US, and the start of the international quarterly reporting season. Find out what you need to know and how...
Jul 08, 2023•28 min
Last year was a difficult one for investors across the board. Against that backdrop, this year looked set to be another challenging one, with slower economic growth and more interest rate hikes expected to pressure markets. However, it’s hasn’t been too bad at all for investors. Here at the halfway point, world shares are up more than ten per cent, having rebounded more than 20 per cent from the lows of October last year. New Zealand investors have also seen their returns boosted further by favo...
Jun 27, 2023•26 min
The S&P 500 in the US fell 1.4% last week, after five consecutive weekly gains that saw the index rise to its highest level since April 2022 at the end of the previous week. Most other global sharemarkets were softer as well, including the local market. After a strong rally, markets lost a bit of steam as the reality of higher interest rates and slower economic activity sets in. More aggressive moves from central banks in the likes of Australia and England have been a reminder that rates cou...
Jun 24, 2023•25 min
The US dollar has been the world’s reserve currency for close to 80 years. It started to displace the British pound in the 1920s, and secured the undisputed mantle after World War II. The dominance of the greenback is entrenched in the sheer size of the US economy. It is the world’s largest, accounting for more than 25 per cent of global gross domestic product. It also has a stable political backdrop, deep capital markets and a strong rule of law, as well as a powerful military. Even so, the US ...
Jun 20, 2023•19 min
It was another strong week for sharemarkets around the world, once again led by the US. The S&P 500 posted its fifth consecutive weekly gain, which sees it up almost 15% this year and some 23.3% above its October 2022 lows. The Federal Reserve meeting was a highlight and while the US central bank left interest rates unchanged, further hikes could be looming in the months ahead. Meanwhile, the March quarter GDP report took centre stage here in New Zealand, but was it really bad enough to be c...
Jun 17, 2023•24 min
After falling for the past 18 months, it’s starting to look like the housing market is beginning to stabilise. The Real Estate Institute’s national house price index peaked in November 2021, and it's fallen 18.1 per cent since then. That’ll be a great comfort to many homeowners, while it will also boost confidence across the economy. At the same time, it doesn’t mean house prices are set to take off again anytime soon. We've still got a few headwinds to contend with, such as a potential rise in ...
Jun 14, 2023•20 min
Last week was another strong one for US shares. The S&P 500 in the US posted its fourth consecutive weekly gain, with a rise of 0.4%.That sees it up 12.0% this year, 20.2% above than the October lows and at the highest levels since August. Looking ahead, this week is shaping up as a busy one. Three major central bank decisions are looming, with the Federal Reserve in the US set to be the main event. With a new set of projections due, it’ll be interesting to see how much support there is for ...
Jun 10, 2023•27 min
Should I pay off the mortgage faster, or use that extra cash to invest? This is always a common question, but it’s especially relevant today. Mortgage rates are at 15-year highs, with borrowing costs at levels many homeowners won’t have experienced before. Paying down the mortgage as quickly as you can is sensible, and it’ll set you on the path to financial freedom. However, it’s not black or white and using some of that spare money to invest along the way will also pay off.
Jun 07, 2023•13 min
Last week was another strong one for US shares, with the S&P 500 rising 1.8% to its highest level since August 2022. Investors celebrated a resolution to the debt ceiling debate, as well as evidence of slowing inflation and an easing labour market. The S&P 500 has rallied 11.5% in 2023, or 17.0% in New Zealand dollar terms! Looking ahead, it will be a holiday-shortened week here in Aotearoa, with markets closed for the King’s Birthday public holiday on Monday. There’s more happening in A...
Jun 04, 2023•23 min
The Reserve Bank of New Zealand (RBNZ) and the Federal Reserve in the US both increased interest rates again last month. You can never be sure, but that could’ve been the final increase from both central banks. RBNZ projections imply as much, and while it’s unclear whether the Fed will move again, many economists believe it too has done enough. What does this mean for investors, and will it prove to be a turning point for financial markets?
May 30, 2023•19 min
It will be a holiday-shortened week in the US and the UK, with both markets closed on Monday. However, there's still plenty for investors to keep an eye on! The US debt ceiling debate will remain front of mind, after news over the weekend of a tentative agreement that could support investor sentiment. On the economic front, we will be watching the ISM manufacturing index and jobs report in the US, and the latest inflation figures in Europe. It'll be a quieter few days here in New Zealand, althou...
May 28, 2023•22 min
World sharemarkets have been remarkably calm in recent weeks, despite plenty of uncertainty around. Inflation is still stubbornly high, nor is it completely clear how much further interest rates will rise. We’ve also got the small matter of the US debt ceiling to resolve. Former Federal Reserve Chair and current Treasury Secretary, Janet Yellen, has said the country might be unable to pay all of its bills by June. The US is the world’s largest economy and its more important borrower, so that’s k...
May 22, 2023•14 min
After all the excitement of Budget 2023, this week we’ll see how the Reserve Bank of New Zealand feels about a little more stimulus than many had expected. The Official Cash Rate is almost certain to increase on Wednesday, although it will be interesting to see how much further the Bank sees it going after that. It’s also a busy week on the corporate front, with several earnings releases to keep an eye on including announcements from market heavyweights Mainfreight and Fisher & Paykel Health...
May 20, 2023•25 min
Artificial intelligence, or AI, is one of the hottest topics around at the moment. We've all heard of ChatGPT, which can help you with your homework or write a pretty good anniversary card for your spouse. Apparently. Many industries are at risk of being disrupted by these advances, potentially leading to some jobs becoming less relevant, or even obsolete. At the same time, the innovations and potential productivity improvements are exciting. For investors, these trends shouldn't be ignored. AI ...
May 16, 2023•21 min
