Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
We look at the latest analysis of housing affordability, based on a range of data, and conclude that it has rarely been worse. In addition, some players are being highly selective in the way they present the data, understating the true picture for many households. We wonder why?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
Its been another crazy week on the markets, with a still-jittery bond market clouding the outlook for a rally in U.S. stocks.
Stocks and bonds have been in a tight relationship over the last few months, with the S&P 500 index surging nearly 7% in the last 10 sessions while the benchmark 10-year Treasury yield has tumbled from a 16-year high to 4.657. Helping market sentiment on Friday was a steadier US Treasury market.
After yields tumbled on Wednesday and surged on Thursday, they were little changed on Friday. The yield on the 10-year was 3 basis points higher in a late move, after having been little changed most of the session. Oil also steadied after a bout of volatility with Brent retaking the $US80 a barrel level. Gold was lower with the futures sitting at 1942.60, down 1.38% on the day, while Iron ore extended its rally, pressing through $US128 a tonne in Singapore.
At the same time, the Cboe Volatility Index,, which measures expectations for stock gyrations, has fallen to a seven-week low of 14.17. While such a retreat in Wall Street’s “fear gauge” would normally be a green light for stocks, there’s a catch: it has not been reflected in the most closely watched measure of Treasury volatility expectations, the MOVE index, which remains near its recent high.
Plus, Moody’s on Friday lowered its outlook on the U.S. credit rating to “negative” from “stable” citing large fiscal deficits and a decline in debt affordability, a move that drew immediate criticism from President Joe Biden’s administration. The move follows a rating downgrade of the sovereign by another ratings agency, Fitch, this year, which came after months of political brinkmanship around the U.S. debt ceiling.
Bargain hunters are swirling around beaten-down shares of U.S. banks, even as skeptical investors say the sector’s problems are likely to persist for some time. The S&P 500 bank index is down around 11% in 2023, a year that began with the failure of Silicon Valley Bank and several other lenders in the worst banking crisis since 2008. The broader S&P 500, by contrast, is up around 15%.
Bank stocks are at an all-time low compared with the S&P 500 based on relative prices, according to data from BofA Global Research. That tumble has made their valuations attractive to some investors: the sector trades at eight times forward earnings, less than half of the 19.7 valuation of the S&P 500.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest from the RBA – Statement On Monetary Policy November 2023, outlines the bank’s latest thinking. The Reserve Bank updated its economic forecasts, which explain why it raised interest rates this month – from 4.1 per cent to 4.35 per cent after four consecutive pauses. And importantly, it shows just how the economic engine is misfiring, with households very much on the front line.
While the business sector, overall, appears to be doing fine, it appears working-age households will continue to do the heavy lifting on containing inflation via higher interest payments, cutting their individual consumption and falls in real wages that are expected to continue until the middle of next year. And due to the combination of stubbornly high inflation and relatively weak income growth, the RBA now expects real household disposable income — a key measure of living standards — to keep sliding sharply until the second half of next year.
And to underscore this, recent OECD data shows that Australian households have suffered the biggest fall in real per capita household disposable income of any advanced economy over the past year. In the 12 months to June, Australian household incomes slumped 5.1 per cent, the sharpest fall recorded across the OECD.
Real view management of the monetary settings from the RBA are simply not working.
https://www.rba.gov.au/publications/smp/2023/nov/
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Following the Optus outage this week, the Senate has launched an Inquiry into the issue and impact. One element to the fore was the lack of access to cash thanks to recent bank branch and ATM closures and some businesses choosing to go digital only. Useless when the network or power goes out.
So we need to make sure the Government hears from us about the essential utility of cash, and that they need to legislate to protect access and acceptance of it.
So make a submission to the current inquiry, deadline for which is 17th November.
Use your voice to make sure our elected officials get the message. Access to cash is a requirement, and it needs to be protected – as a safeguard to democracy!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Optus’ network failures have again highlighted the risks to the community when technology breaks. There were structural reasons why the failures happened, but the fallout was significant.
This brings the need to ensure access to cash is enshrined in law in Australia into sharp contrast again. This has already happened in a number of other countries.
The Change.org petition https://www.change.org/p/an-australian-cash-and-banking-guarantee has more than 130,000 signatures, and I encourage my followers to sign up.
We cannot be held hostage to a digital future which is intrinsically unreliable.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today we walk through the latest and troubling results from our surveys and analysis. Unfortunately, we see a further rise in cash flow stress (something confirmed by other analysts using different methods).
Next week we will be running a live show on the analysis, but today’s show walks through the main highlights.
Given the latest RBA rate hike, we expect more households to get caught out as rate grind higher.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
This is an edited version of our live discussion with Damien Klassen, Head Of Investments At Nucleus Wealth And Walk The World Funds. Given the recent reversals in bond yields, and the US Dollar, what does this say about the markets as we move into the close of the year?
We discussed the RBA rate call, bond markets, oil prices and some interesting sectoral moves.
Original live stream here: https://youtube.com/live/b0eg9wogerQ
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest from Edwin as we look at the trends and numbers for this week. The construction questions surrounding high-rise continues, as the listings in Melbourne rise. Now we come to the upcoming Christmas and New Year break – how will this impact the numbers?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
Contrary to the MSM reporting, home prices are falling fast in some locations. Of course there is lots of spin about relating to this, but are we highlighted in our shows last year, falls were, and are occurring. Once again need to go granular.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
The Senate Inquiry into ASIC took further evidence this past week. One notable contribution was from an academic, who really went to town on the role and purpose of the regulator. Indeed, he posed the question” Why does ASIC not enforce the law….”?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/