Martin North – Page 145 – Digital Finance Analytics (DFA) Blog

Decoding Market Uncertainty

Wall Street’s main indexes fell on Thursday and a rally in U.S. stocks faded late in the session as investors debated whether equities were becoming bargains after a sell-off to start the year that has seen the NASDAQ fall into correction territory.

Major U.S. indexes had been up sharply for much of the day after a steep drop to start the week. The NASDAQ on Wednesday closed 10.7% below its November all-time high, confirming it was in a correction.

In a note posted Thursday, Grantham, the co-founder of Boston asset manager GMO, describes U.S. stocks as being in a “super bubble,” only the fourth of the past century. And just as they did in the crash of 1929, the dot-com bust of 2000 and the financial crisis of 2008, he’s certain this bubble will burst, sending indexes back to statistical norms and possibly further.

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The Unemployment Shock!

The latest ABS data was a big surprise – even if it was compiled before the latest COVID phase. This may put more pressure on the RBA.

The latest edition of our finance and property news digest with a distinctively Australian flavour.

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Tech In Correction Territory!

Strong U.S. and European corporate results could not stop a slide on Wall Street, where the NASDAQ entered a correction, as rising crude prices kept inflation concerns alive even as bond yields eased a bit after earlier touching fresh multiyear highs.

The NASDAQ closed more than 10% lower from its Nov. 19 record closing high to confirm a correction as investors continue to price in the Federal Reserve moving faster to hike interest rates, fears that led to Tuesday’s sell-off.

The latest edition of our finance and property news digest with a distinctively Australian flavour.

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Land Values Rampage!

The Valuer General is responsible for providing independent and impartial valuations for use by councils and the state government for levying rates and taxes and determining compensation for landowners when their land is compulsorily acquired.

The independence of the Valuer General ensures a clear separation between the impartial land valuation process and how state and local government use the valuations for levying rates and taxes or for determining compensation following the compulsory acquisition of land.

The NSW Valuer General latest report shows that Residential land values in the state saw an overall increase of up to 24.8 per cent from $1.4 trillion to $1.8 trillion in the last financial year. They called this “an astonishing” 25 per cent rise. The report also revealed the total value of land in NSW rose 24 per cent over the reporting period – doubling to $2.2 trillion since 2014, representing a dramatic acceleration in the historic rate of growth. Every market sector was hot through a tumultuous 12 months, according to the analysis of more than 67,000 property sales.

Coastal lifestyle locations Byron Bay and Kiama have led the way as NSW residential land values. The rural market was the standout performer with a 26 per cent rise, the logistics boom propelled a lift in industrial land values of 23 per cent, while commercial and retail land values increased 15 per cent.
“It took almost 100 years – from 1916 to 2014 – for the value of land in NSW to surpass $1 trillion in total value, but just seven years to go from $1 trillion to $2 trillion,” Valuer-General David Parker told The Australian Financial Review.

“In the middle of a global pandemic, to have this level of land value growth across the entire state is astonishing,” Dr Parker said.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

Oil – The Last Hold Out?

Once gain the markets were weaker in the US on Tuesday. As well as inflation fears and interest rate hike concerns, falls were triggered by an 8% slide in Goldman Sachs shares after Wall Street’s premier investment bank missed quarterly profit expectations, hampered by weaker trading revenues and rising expenses.

That share decline put Goldman on course for its worst single-day showing since June 2020, shedding about $10 billion off its market valuation since Friday’s close, although it recovered to trade down 6.5% towards the close.
This earnings miss triggered further selling in Wall Street banks. Morgan Stanley, which reports quarterly results on Wednesday, was down more nearly 5%, while JP Morgan added to losses from a week earlier, down more than 4%.

We are seeing a repeating story, with bank stocks reporting lower than expected earnings. Bank earnings in the fourth quarter have taken a hit from lower trading volumes as the Federal Reserve slowed the pace of its asset purchases after 18 months of pumping liquidity into capital markets to ease the impact of the COVID-19 pandemic.

The Fed’s intervention had fuelled trading activity as clients bought and sold more stocks and bonds, repositioning their portfolios to match the changing economic environment. But fourth-quarter earnings from large U.S. banks have showed the market backdrop returning to more normal levels.

Go to the Walk The World Universe at https://walktheworld.com.au/

Today’s post is brought to you by Ribbon Property Consultants.

If you are buying your home in Sydney’s contentious market, you do not need to stand alone. This is the time you need to have Edwin from Ribbon Property Consultants standing along side you.

Buying property, is both challenging and adversarial. The vendor has a professional on their side.

Emotions run high – price discovery and price transparency are hard to find – then there is the wasted time and financial investment you make.

Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.

FINAL REMINDER: DFA Live 8pm Sydney: Evan Thornley

Join us for a live discussion as I explore the real estate industry with Executive Chair at LongView. LongView aims to help people successfully invest and manage their properties over the long term. With serious Silicon Valley data analytics, finance expertise and arguably the strongest property management team in Melbourne, they help over 4,000 property investors with over $7Bn of residential property investments.