"Intelligent Insight"
In the first Antispruik show of 2023, we look at recent price falls across the portals covering areas of Western Australia. This is data from the property portals extracted by Cookie, and whilst they might not be statistically accurate, the more than 100 examples tell a compelling story.
Thanks as always to Cookie for his efforts.
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Go to the Walk The World Universe at https://walktheworld.com.au/
The latest edition of our finance and property news digest with a distinctively Australian flavour.
Any incoming data requires interpretation to make sense. And the truth is, factors like recency bias, expectations, and hopium can all influence how newsis interpreted, and decisions made. We saw this on Friday when US markets read the data as signs of a slowing economy, and immediately went to the FED easing rate rises, despite earlier news that they are keeping at the rate rising until inflation is crimped. Treasury yields fell sharply as investors continued to price in the step down in the pace of rate hikes at the Fed’s meeting next month.
But I think the central bank will need to see further slowing of price increases in the December inflation report, due out next week, before deciding whether to slow its next rate hike. It raised rates 50 basis points in December.And future earnings expectations are likely overdone for now, so perhaps markets were one sided in their interpretation of the data. In the minutes from the Fed’s December meeting [released] this week, it was unanimous among members of the FOMC group that they are going to keep interest rates high all year long. We will see.
CONTENTS
0:00 Start
0:15 Introduction
0:30 Data is not Neutral
1:30 US Jobs Report and Macro
3:40 US Markets
7:40 Oil Down
10:20 Gas Down
12:35 Europe
14:00 China and Asia
18:00 “N” Shaped Recovery
19:00 Australian Market
20:19 Gold too high?
21:40 Crypto Bearish
23:25 Summary and Close
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Significant news from the Federal Reserve (FED) and The Peoples Bank Of China (PBOC) shows how divergent their two monetary policy paths are. The FED is committed to lifting rates sufficient to snuff out inflation (despite the markets continually seeking a pivot) and withdrawing stimulus while the PBOC is seeking to provide additional support for the Chinese economy, including the property sector.
This divergence is striking and will have significant impact on exchange rates and global financial flows. Both though are talking about Central Bank Digital Currencies.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Just before Christmas APRA advised the imposition of a 1% Counter Cyclical Capital Buffer on Australian Banks. Interesting timing, seeing as the Bank For International Settlements had set 2023 as the required date. Up to this point APRA has argued a 1% buffer was not needed in Australia – so what changed?
So, we wonder, are they being forced to comply. and what does this mean for our “strong” banks as interest rates rise and lending slows?
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
The latest data to end November 2022 from the RBA and APRA shows that the rate of credit growth is slowing – presumably due to higher rates and reduced borrowing power. That said refinancing including equity draw-down is on the rise…
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
This is an edited edition of my recent live show, where I discussed the outlook for 2023 investing with Damien Klassen, Head of Investments At Nucleus Wealth and Walk The World Funds.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
An important article from The Regional’s Dale Webster, published in Independent Australia, highlighting the lies being told to try to justify the removal of banking services from Regional Australia.
https://www.theregional.com.au/
The truth is bank employees are being incentivized to lose their own jobs, and local communities are being crushed by the loss of critical services, while Politicians watch from the sidelines and in fact are complicit.
Banks are destroying their social licence, in the interests of short-term profit.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
Join me for a live discussion with Damien Klassen Head of Investments At the Walk The World Funds and Nucleus World.
You can ask a question live!
My thesis and modelling show that availability of credit – driven by interest rates and borrowing capacity is by far the largest driver of home prices. Cut rates and flood the economy with cheap money and property prices are pushed higher, as happened through the COIVD period. Lift rates, tighten borrowing power, and remove stimulus, and prices fall. This thesis has been proved over the pst three years, with Australia’s housing market suffered its biggest annual decline since 2008 last year as sharp interest rate hikes sapped buying power and put off investors.
CoreLogic released their latest national Home Value Index which fell 5.3% in 2022, the first decline since 2018. Annual falls were the biggest in the bellwether market of Sydney, which slid 12.1%, followed by an 8.1% drop in Melbourne. National values declined 1.1% in December, according to the report.
Remember that The Reserve Bank raised interest rates by 3 percentage points since May to 3.1% and is widely expected to hike one or two more times this year. RBA officials have generally publically expressed confidence in Australia’s housing market, highlighting that prices are still higher than at the onset of the pandemic, though recent FOI data underscores their concern falling prices will sap confidence. This despite unemployment at the lowest level in almost 50 years, so they argue most borrowers are well placed to meet their commitments and so loan arrears are likely to be limited.
But overall Australia’s A$9.4 trillion housing market has declined 8% from the recent peak reached in April, after surging 28.6% from a pandemic-induced trough, CoreLogic said.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
My first 2023 Rant with Edwin Almeida, our Property Insider. Edwin takes a look at the latest numbers, and tables his suggestions for what will happen in this potentially prickly year!
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/