Despite the restrictions on what we can say (sic) Edwin and I are back for another Rant, looking at the latest industry tricks, and numbers. We also kick around the questions around auctions, including vendor paid advertising, and how to counteract the emotion drummed up at the event.
And, given the hopes of rate cuts, and the anticipated upcoming election, how is this playing into the market; as well as the impact of the lower exchange rate.
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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.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
This is our weekly market update where we start in the US, cross to Europe and Asia and end in Australia, covering commodities and crypto on the way. It’s the digest I use to help me understand what’ happening, and I hope it may help you too, despite the fact that this show actually takes longer to make than my others and tends to get lower views. But it’s the critical underpinning of all my work, so it’s really important! And be warned we cover a lot of ground!
This was another complex week, with waves of news, directives, trade issues and economic data causing ripples across markets, against the backcloth of reinvigorated inflation fears, and questions of whether Central Bankers are really as smart as they like to think. The global MSCI index was pretty flay across the week, but down 0.67% on Friday, while the European STOXX 600 rose 0.59% across the week, having closed at a record high on Thursday, helped by mostly robust company earnings but also falling on Friday.
US equities closed broadly lower after the economy added fewer new jobs last month than expected, and a survey found consumers increasingly worried about rising prices, bolstering the case for the Federal Reserve to hold rates steady for longer.
U.S. job growth slowed more than expected in January, likely restrained by wildfires in California and cold weather across much of the country, but a 4.0% unemployment rate probably gives the Federal Reserve cover to hold off cutting interest rates at least until June.
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Journalist Tarric Brooker is back with charts, to parse the latest economic data, as we look at who is really calling the shots. Truth is, below the headline data there are some important issue to pick apart. And what we are being presented as the truth may be spin.
Tarric’s charts are available at: https://www.burnouteconomics.com/p/dfa-chart-pack-7th-february-2025
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The New Zealand unemployment rate continues to climb, reaching 5.1% in the December 2024 quarter, according to the latest Stats NZ figures – the highest level it’s been since 2020. It’s up from 4.8% in the September 2024 quarter.
Men accounted for 85% of the annual decrease in employment, reflecting substantial falls in the male-dominated occupation groups of technicians and trades workers, and machinery operators and drivers. Within the overall decrease in seasonally adjusted employment for men, there was also a shift from full-time to part-time work. While the number of men in full-time employment fell by 36,000 annually, the number in part-time employment grew by 9000.
While politicians throw rocks across the aisle, the one lever of interest rates at the heart of monetary policy is deeply flawed.
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The RBA has held the cash rate at a 13-year high for more than a year, awaiting further evidence that inflation is irreversibly back to its 2 per cent to 3 per cent target. Markets since Mr Trump returned to the White House are on a roller-coaster ride as I discussed on my live show on Tuesday. Now Beijing has hit back with tariffs on US goods in a swift response to new American levies on Chinese imports. Earlier, Mr Trump suspended his threat of hefty tariffs on Mexico and Canada for a month. So what will the RBA do?
While one factor in play is Donald Trump’s chaotic trade policies, we also have the “adjusted real inflation rate looking though the Government support for electricity, rents and medicals. Is the inflation really well anchored in the 2-3% band, a signal the RBA is seeking?
The December quarter inflation report did little to counter the RBA’s consistent message demand in the economy is still too high.
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Go to the Walk The World Universe at https://walktheworld.com.au/
With Parliament back after the summer break, if Parliamentary Question Time anything to go by, the issue of costs of living pressures will be front and centre of the upcoming campaigns. Worth reflecting how effective Trump proved to be in the US asking the question, are you better off now, or previously!
Of course words and figures can differ, not least because the data may not all point in the same direction, and can be spun vigorously. For example, inflation may be coming down from its highs, but the accumulated additional costs of pretty everything still hangs heavy on household budgets. And whilst cost of living support, like power rebates or rental assistance can help fudge the headline figures and even perhaps bounce the RBA into a rate cut, data still shows we have a problem.
For example, the latest from my household surveys, looking at financial stress in cash flow terms shows that around 76% of those in the rental sector are under pressure, and just under half with mortgage payments are in the same boat. Others are doing significantly better, so averaging masks the extremes we are seeing.
The latest data from the ABS on Household spending shows that it rose 0.4 per cent in December, seasonally adjusted following a 0.8 per cent rise in November and a 1.0 per cent rise in October. Or in other words a slowing of spending.
Today the ABS published their Selected Costs of Living Cost Indices. Over the twelve months to the December 2024 quarter, the LCIs rose between 2.5% and 4.0% despite all the Government support measures. Of the household types, Employee households had the largest annual rise in living costs, up by 4.0 per cent, with mortgage interest charges up 14.7 per cent over the year.
Cost of Living could be fixed by a stroke of a pen, if the Government reserved east coast gas for Australians, rather than shipping it off shore, (or worse also having to re-import gas at international prices), and also start taxing those exports properly. If politicians are serious about costs of living why not start Question Time with a gas related debate? The answer is simple, neither side of politics wants to admit their policy errors in this space, preferring to gaslight costs of living pressures for political advantage. This will I think come back to bite them as households wake up to the truth. Much of the costs of living pain are self-inflicted due to plain stupid policy and self-interest.
http://www.martinnorth.com/
Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited live discussion with Damien Klassen, Head of Investments at Nucleus Wealth and Walk The World Funds. The world has changed, as the international “rules based order” comes under pressure from Trump’s tariffs. What are the implications for investors, and how should we prepare for greater volatility and uncertainty?
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Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/
Go to the Walk The World Universe at https://walktheworld.com.au/
In tonight’s show we catch up on Edwin’s predictions – does NOSTRADAMUS walk among us? We look at the massive rise in Council Tax, and also the rise in listings, but only in some places.
And given the upcoming election we examine some of the early promises being made in the quasi campaign, despite the gap between the promised 1.2 million well sited homes over 5 years and what is happening on the ground.
Edwin also highlights an important issue for a prospective property purchaser – get your paper work in order!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts
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.
Edwin understands your needs. So why not engage a licensed professional to stand alongside you. With RPC you know you have: experience, knowledge, and master negotiators, looking after your best interest.
Shoot Ribbon an email on info@ribbonproperty.com.au & use promo code: DFA-WTW/MARTIN to receive your 10% DISCOUNT OFFER.
The news outlets are full of more property news, with some spruiking that the hope of a rate cut in February has spurred people into action after the holidays, with a focus on Melbourne property prices rebounding.
So, let’s look at the data and see what is happening. Actually, the January update on prices from PropTrack showing that nationally prices fell just 0.1% in January, to a median value of $796,000.
Clearance rates are another metric in focus, but as I have discussed before they are also full of holes. Specifically, Preliminary clearance rates generally fall as the results of more auctions are collected. Domain reported a 66.6% national clearance but a year ago it was at 60.6%. CoreLogic preliminary data showed that the combined capitals returned a clearance rate of 65%.
As for wants ahead, well of course no one really knows. Which is why I run scenarios, which will be updated shortly. This week we had predictions from KPMG. As discussed in the AFR, KPMG chief economist Brendan Rynne said Melbourne’s house prices are tipped to climb 3.5 per cent this year, rebounding for the first time since last February, and slightly outpacing Sydney, fuelled by improved housing affordability after five years of sluggish growth, while Sydney’s housing values are expected to increase by 3.3 per cent, which is also higher than the 2.5 per cent gain last year.
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Go to the Walk The World Universe at https://walktheworld.com.au/
This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way.
As expected, this was a volatile week, as questions over AI tech, tariffs and inflation all converged to stoke significant volatility across the trading days. Monday saw big falls thanks to DeepSeek emerging with potentially a different economic approach to AI delivery, the Fed held rates during the week, while the ECB and Canada cut their benchmark rates, and late on Friday, President Donald Trump saying he would indeed place 25 per cent tariffs on imports from Canada and Mexico and 10 per cent tariffs on goods from China effective on Sunday and those on imports from the European Union would follow.
Trump said while the new tariffs might cause some disruption short term, he was not concerned about the reaction in markets. He also said there was nothing that Canada, Mexico nor China could do to forestall his plans. “Starting tomorrow, those tariffs will be in place,” White House spokeswoman Ms Leavitt told reporters. “These are promises made and promises kept by the president.”
And in economic news, the latest U.S. prices increased in December while consumer spending surged. The personal consumption expenditures (PCE) price index rose 0.3% last month after an unrevised 0.1% gain in November, the Commerce Department said on Friday. In the 12 months through December, the PCE price index advanced 2.6% after rising 2.4% in November. This mean that U.S. inflation increased by the most in eight months in December amid robust consumer spending on goods and services, suggesting the Federal Reserve would probably be in no hurry to resume cutting interest rates soon.
Gold hit an intra-day all-time high of $2,800.99 in spot trading earlier today, as investors adjusted their positions ahead of US President Trump’s decision on whether to slap 25% levies on Canadian and Mexican imports.
The Australian sharemarket notched its second record high of the week on Friday, capping the bourse’s best month since July. The S&P/ASX 200 closed 0.5 per cent higher at 8532.3 – its largest weekly gain in five weeks. The index rose 4.6 per cent over January.
Bitcoins adoption as a reserve asset by a powerful country could trigger a domino effect, prompting other countries to follow suit. But the path is as yet far from certain.
More broadly, and as expected, markets will remain highly volatile, and global trade norms potentially get reset, and inflation still bubbles along below the surface. Just remember that markets remain in over-valued territory, and Deep Seek is an object lesson in how black swan events can emerge unheralded. Expect a wedge of black swans in the weeks ahead.
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