I caught up with Peter Marshall from Mozo to debrief on the latest RBA rate hikes, and the fallout.
And more rate rises must be expected too…
Peter Marshall has been working in the Australian banking and finance industry for over 20 years and oversees Mozo’s extensive product database. He is regularly sought out for his expert commentary and analysis on banking and interest rates trends by print, radio and TV media.
While some market analysts are calling a significant rise as inflation is crushed, others are more negative, seeing a potential drop in the markets, before a pivot – but not for another year or so. Investment sentiment is out of line….
So, the question is, are further market falls likely? How low will corporate earnings go?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Thanks to Senator Rennick, and others, the Senate agreed to an Inquiry into the closure of Regional Bank Branches, the first in nearly 20 years.
So, there will be a chance for regional communities to make submissions and the Senate should write to the Banks to ensure they hold off on further closures pending the December report deadline.
Thanks to Dale Webster from the Regional for her article on this important matter.
Democracy in action….
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Join me for a live discussion about the state of play relating to household finances, stress and scenarios. We will explore the latest from our surveys and models, and you can ask a question live! We will have our mapping tools and post code engine online.
Go to the Walk The World Universe at https://walktheworld.com.au/
In our latest Monday chat, we look at the NSW proposal to match prospective renters with older homeowners (what could possibly go wrong?), the latest listings numbers, and the surprising demand for some property. And very important, we say to look up!
Something weird is afoot. There is much talk of falling inflation, moderating wages, record-low unemployment and possible soft landings. Yet some on Wall Street says 2023 will likely turn ugly.
Sure, we had a beautiful January for investors – but what if this is only a mirage—a stock rally that’s already gone too far.
Well, this the warning from strategists at Bank of America, who said investors could face brutal declines if economic growth crumbles in the second half of the year. The risk is that inflation flares up again over the next few months, and that the US economy faces a deeper recession (than that initially predicted) after staying resilient in the first six months of 2023, they wrote. But with more experts seeing potential success for the Fed after a year of panicky recession calls, it may be a warning that’s hard for some to heed. The “most painful trade,” the bank’s strategists wrote, is always the “apocalypse postponed.”
The traditional favourable start to financial markets in 2023, due to investor fund inflows that typically accompany the new year, has been turbocharged by data pointing to a greater possibility of a soft landing for the US economy and, most recently, the signals coming out of the Federal Reserve.
So, underinvested investors need to assess their willingness to lose as valuations surge ahead of the consensus view on the economic outlook says Mohamed A. El-Erian is a former chief executive officer of Pimco, president of Queens’ College, Cambridge; chief economic adviser at Allianz; and chair of Gramercy Fund Management.
The generalised price rally has been so quick and so big for both stocks and bonds that it raises an interesting question for underinvested investors who have not yet put their money to work. What they should do correlates closely, but not entirely, to their economic and policy views.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The ABS reported a further fall in new credit commitments in December 2022, across most categories. Even refinancing was down a little, though still elevated as people seek cheaper loan options.
First time buyers are continuing on the sidelines, with volumes falling here too.
But borrowing for holidays rose significantly.
Average loan sizes rose however, with Western Australia leading the way!
More signs of further home price falls ahead?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s afternoon chat with journalist Tarric Brooker focuses on the question of whether inflation is really falling, or whether the markets are misreading the data streams.
You can follow along with Tarric’s slides at: https://avidcom.substack.com/p/charts-that-matter-3rd-february/
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Overnight we saw the Bank of England and the ECB lift the target rate by 50 basis points.
The UK story appears to be one where inflation is easing a little though growth prospects remain weak into the medium term. In the ECB, inflation is perhaps more troublesome, and further rate rises are anticipated. But both are seen by the market to be the peak of this raising cycle (though with risks to the upside).
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The FED lifted by the expected 25 basis points overnight. In the press conference he was still underscoring the need to strangle inflation but was also sanguine on the markets – which traders took as a positive sign.
That said, the disconnect between the FED and the markets continues, suggesting further short-term strength, before reality sets in, or the FED really backflips.
Disinflation is now the new watch word!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
