The full-time whistle (or horn, if you're a hockey fan like me) is about to be blown on a market year that confounded all the consensus expectations. Luckily, it was for all the best reasons. As the below table shows, the S&P 500 has climbed 27% and has recorded 57 all-time highs this year (as of time of writing.) Corporate bonds have held up despite weaker earnings while gold has reset its own all-time high repeatedly thanks to immense central bank buying. Even Bitcoin has just cracked US$1...
Dec 09, 2024•28 min•Season 3Ep. 14
Interest rates have not been cut this year in Australia, much to the chagrin of many investors. Yet despite this, the housing market has continued to remain remarkably strong. While central banks still impact the performance of the housing market, it's clear that the bigger factors this cycle have been immigration, labour shortages, and the increased cost burden on builders to finish these projects. All this is to say increased demand, decreased supply, and no lasting solutions in sight unless t...
Nov 06, 2024•25 min•Season 3Ep. 12
The prospect of the first interest rate cut for this cycle from the Reserve Bank of Australia continues to be pushed back. And while Moody's may argue that "hope is on the horizon", there is no denying that an ultra-tight labour market, in addition to an elongated disinflation process, has made the RBA's task a lot trickier. This challenge was made all the more apparent last week when the September jobs report was released. The report revealed that the Australian economy added more than 64,000 j...
Oct 28, 2024•19 min•Season 3Ep. 11
For the first time in four years, the world's most consequential central bank, the US Federal Reserve, has cut interest rates. Unusually for the Fed, the cut was double the regular size of an interest rate move. As a result, different asset classes had different reactions. For equities, which are priced for a soft landing/Goldilocks scenario, the move was met with cheers. The S&P 500 has since clocked its 41st and 42nd record highs in quick succession. Meanwhile, bond markets were left disap...
Sep 30, 2024•21 min•Season 3Ep. 10
The overwhelming consensus we are hearing from the professional investing community is that the volatility spike on August 5th was not so much a scare, but a gift for patient investors. Sure, it was the worst day for the ASX 200 in four years and the worst for the Nikkei 225 since 1987. But, to quote from an interview we just completed with Lazard Chief Market Strategist Ronald Temple , it was a "healthy moment" and "a great opportunity to add capital." But just because there has not been more d...
Sep 01, 2024•20 min•Season 3Ep. 9
Global investors know Australia for three things - our houses (the property investment opportunity), our holes (the massive mining sector), and our beaches (and let's face it, our sharks). But the truth is that the Australian economy is driven by a much larger force than the property or mining sectors can muster - the consumer. Consumer spending makes up about 50% of Australian GDP, according to the OECD, and consumer stocks (discretionary and staples combined) make up about 11% of the ASX 200. ...
Aug 19, 2024•19 min•Season 3Ep. 5
We are about to enter the most important month on the calendar for Australian investors. And it's not a far stretch to say that there is a lot at stake for the ASX 200 over the next four weeks. At the last reporting season in February, over 80% of ASX 200 companies made a profit. That number sounds good until you realise that is a) well below the long-run average and b) represented a third consecutive reporting season of declines for this metric. Moreover, the balance between companies growing e...
Aug 05, 2024•22 min•Season 3Ep. 7
Welcome to the Goldilocks era for income, where a good quality term deposit can pay 5%, an investment grade corporate bond can net you 7-8%, and the hottest trade in town (private credit) is now aiming for upwards of 10% yield. Sure, NVIDIA might be the hottest growth trade in town but there are plenty more opportunities for income investors across asset classes. No longer are rates in the basement and stocks the only place to earn solid yield - as the following flow chart shows. In fact, speaki...
Jun 11, 2024•26 min•Season 3Ep. 6
Forecasts are forecasts but the numbers don't lie. And at the end of the day, the numbers show an extremely tough conundrum for the Reserve Bank of Australia. Services inflation has not come down as fast as the RBA would like and goods inflation is starting to tick up. And while the overall inflation downtrend is generally intact, markets are extremely jittery to any upside surprise. The jobs market remains incredibly tight, housing costs continue to skyrocket, and consumer-led indicators like r...
May 13, 2024•21 min•Season 3Ep. 4
Cast your mind back to when markets were expecting seven rate cuts from the Federal Reserve, thanks to hopes of an immaculate disinflation in the United States and the persistence of a tight jobs market both stateside and in Australia. The 10-year yield in the US was under 4% and the crude oil price was hovering at around US$70/barrel - a warm price but not one that would cause alarm among investors. Remember that time? Believe it or not, that was just five months ago. Fast forward to today and ...
Apr 15, 2024•21 min•Season 3Ep. 4
In this brand new episode of Livewire's top-down investing show Signal or Noise , we'll aim to distil the noise and make sense of where the best investment opportunities live. Joining myself and our permanent panellist, AMP Deputy Chief Economist Diana Mousina are: Lukasz de Pourbaix , Global Cross-Asset Specialist at Fidelity International Tom Nash, Fixed Income Portfolio Manager at UBS Asset Management Wire Link: https://www.livewiremarkets.com/wires/can-the-everything-rally-keep-going...
Apr 02, 2024•22 min•Season 3Ep. 3
What do all the numbers of the last four weeks really say about the state of corporate Australia - and where are the best of the best investing their money given what has been handed down? To find out, we bring you the Signal or Noise February Reporting Season episode. Joining AMP's Diana Mousina and your host, Livewire's Hans Lee, are two veteran stock pickers who also have a strong macro nous: Steve Johnson , CIO at Forager Daniel Moore , Portfolio Manager at IML Wire: https://www.livewiremark...
Mar 03, 2024•19 min•Season 3Ep. 2
While Signal or Noise was away on its summer break, the bulls were certainly out in force. The Santa Rally which dominated the end of 2023 has been spurred on by an even bigger anticipation for rate cuts. The RBA was not tipped to cut rates at all just six months ago. Now, thanks to an inflation print that outshone almost all expectations, the Australian rates curve has two cuts priced in by the end of 2024. And as if on cue, the ASX 200 hit an all-time high. And until the Federal Reserve's hawk...
Feb 05, 2024•18 min•Season 3Ep. 13
Signal or Noise is a show that is designed to make sense of data and headlines - and 2023 had both of those in spades. For starters, 2023 revealed just how much 425 basis points in rate hikes from the Reserve Bank of Australia is affecting the economy. Economic growth has slowed markedly and inflation is still more than double the RBA's target. But the labour market remains remarkably resilient, fuelled by migration and a choice of more hiring over increasing existing productivity. This year was...
Dec 17, 2023•31 min•Season 2Ep. 12
What does the housing cycle look like ahead of 2024? And will the consensus forecast of 5% national house price growth be smashed again? To discuss it all, Signal or Noise has assembled the country's top property experts for our annual show focused on the Australian housing story. Joining moderator Hans Lee and AMP's Diana Mousina are: Eliza Owen, CoreLogic's Head of Australian Research, and Chris Bedingfield, Principal and Portfolio Manager at Quay Global Investors. Note: This episode was filme...
Nov 19, 2023•30 min•Season 2Ep. 11
For a show called Signal or Noise, market pricing of late has been full of confusing and contradicting signals. On one hand, equity markets in Australia and the US pulled back from recent highs. The ASX 200 is tracking at six-month lows while the NASDAQ is off by more than 6% in the last 30 days alone. The US 10-year yield, widely considered the global benchmark for asset valuations, is up 50 basis points in just one month. BCA Research has described the savage sell-off in bonds as indicative of...
Oct 05, 2023•24 min•Season 2Ep. 10
When Livewire's Hans Lee set out to create a macro-focused series 18 months ago, he had one mission. From the beginning, the aim has been to make economics and data more relevant to the everyday investor. In every episode, we endeavour to take the most interesting headlines and narratives from the financial press before breaking them down in a way that you can use in your investment journey. But as the series has developed its audience over the last 18 months, we've also learned there has been a...
Sep 10, 2023•26 min•Season 2Ep. 9
Cast your mind back to December 2022 when the consensus among analysts was that 2023 would see an extension of the large falls in markets. The 40-year rally in government bonds which preceded last year's crash was ancient history and central bank rate hikes would keep equities down and yields higher for longer. Well, that hasn't panned out. Far from it. It's equities that are off to the races and bonds are comparatively lagging. In fact, the BlackRock investment returns map is showing that devel...
Aug 06, 2023•26 min•Season 2Ep. 8
Investors have arrived at one of the most important and fascinating earnings periods in a long time. Weaker profit growth and cautious guidance statements look likely to dominate the upcoming annual results season. After all, the list of headwinds is plentiful and many of them remain unresolved. Is the Reserve Bank's July pause actually going to stick this time? Australian inflation sits at around 6% but which businesses will bear the brunt (and benefit) of those increased costs? Can the leading...
Jul 30, 2023•26 min•Season 2Ep. 7
On May 3rd, 2022, the Reserve Bank of Australia hiked the cash rate target by 25 basis points to 0.35%. In the last paragraph of that day's decision statement, the Board wrote the following: "The Board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time. This will require a further lift in interest rates over the period ahead." Since then, the RBA has hiked that rate by 400 basis points (4%) and still isn't ruling more out, even if it creates...
Jul 03, 2023•28 min•Season 2Ep. 6
No matter your age, market experience, or life goals, one thing every investor loves is a dividend. And with good reason! Australia has a friendly tax structure for those who rely on those dividends for passive income. But after 11 rate rises in an unprecedented year for markets, other investment avenues have come back into vogue. Bonds are back, thanks to a massive spike in yields across the government and corporate curves. Rental yields continue to go up, thanks primarily to the massive shorta...
Jun 04, 2023•23 min•Season 2Ep. 5
Before the COVID-19 pandemic, the Reserve Bank of Australia was considered one of the leading lights in the global central banking circuit. For a large part of the last 30 years, inflation has been within the Bank's 2-3% target and the broader economy has not been in a technical recession once thanks in large part to strong monetary policy settings. When the pandemic arrived, the cash rate was just 0.75%. It was quickly cut to 0.1% and Governor Philip Lowe strenuously argued that the nominal int...
May 07, 2023•25 min•Season 2Ep. 4
Banking is a game of confidence. When the public loses faith in its financial institutions, the whole system crumbles. This month's episode of Signal or Noise probes those exact questions and how the fallout from the global banking crisis is impacting the decisions of investors. Joining moderator Hans Lee are: Diana Mousina, AMP Deputy Chief Economist and series regular David Cassidy, Head of Investment Strategy at WILSONS Daniel Siluk, Portfolio Manager at Kapstream Capital Note: This episode w...
Apr 12, 2023•22 min•Ep. 3
The global commodities market is at a vital point in its current cycle. Years of underinvestment have caused massive supply problems in the energy market. Climate change has drastically changed the food production supply chain. And central bank rate hikes are adding to real yields - creating a headwind for gold investors at a time when gold should be thriving. It's also been just over a year since Russian forces invaded Ukraine, causing already high prices to soar even more. At the outbreak of t...
Mar 12, 2023•22 min•Ep. 2
Since the last episode of Signal or Noise was taped in early December, the narrative around the global economy has shifted dramatically. But nowhere has it shifted more than in the world's second largest economy. While most major markets were in holiday mode, the Chinese government decided to reopen its economy and people to the rest of the world. The landmark move followed three years of intense lockdown restrictions. And much like the experience of other countries, consumers have a lot of pent...
Feb 13, 2023•24 min•Ep. 1
