Market Update

Housing Market The Australian Bureau of Statistics has released dwelling approvals data for the month of May at a national level showing the number of dwelling approvals fell by 5.6% to 16,448.  The decline was due to the unit and apartments dropping by 12.1%, however home approvals actually rose slightly.  There is still the belief that there is a housing shortage especially in the three major cities of Sydney, Melbourne and Brisbane. Capital City dwelling values rose 0.8% over the June quarter but the second quarter of 2017 shows the property market demand is dropping off to some extent.   Investment Market There is a tremendous interest in the development of lithium batteries.  Over the next 5-10 years There is going to be tremendous development in this area.  The very fact that China is gearing up its factories to be a leader in this field of development.  Currently China manufactures 55% of batteries globally. One of the big problems with electric cars is the cost of batteries.  If China is going to be the major player in this market, this could help reduce the cost of batteries.   Volatility in Oil Prices The current volatility in oil prices has been overshadowed by the crisis in the Middle East with Saudi Arabia and the United Arab Emirates breaking off relations with Qatar.  This obviously has an impact on investments in the emerging markets.  The political upheaval in the European markets also has an impact when considering to invest in these markets. Investors are forced to consider the impact of these political upheavals and what effect  they are having on these...

RBA Announces Official Cash Rate Call

There was no surprise when the RBA at its July monthly board meeting announced another hold on its official interest rate of 1.5% for July.  The RBA last moved rates  August 2016 down to the current rate. There is speculation among analysts that the next rate move will be upward.  The RBA remains positive that growth will pick up especially since the release of solid jobs data.  The RBA is still unsure as to whether the property markets in Sydney and Melbourne have slowed down. While the labour figures are looking positive the weak underlying inflation figure will hold the RBA back from increasing rates.  Also, International Markets are still a concern which will also impact on the RBA increasing rates. John Edwards the Ex RBA member recently predicted the RBA will increase rates eight times over the next two years.  The general feeling among analysts is that this is highly...

Market Update

Markets are still positive and ASX on Monday went up 0.78% to 5,948.90. The Dow up slightly 0.01% to 20,658. The next few days the ASX could pass through the 6000 point barrier. Recent surveys show market confidence to be high and those surveyed show 1 in 2 believe the market will be higher in 12 months’ time. When you look at the size of the global debt at US $216 trillion, 325% of global GDP and increase of US $70 trillion in the last decade, one does get concerned and wonders if investor confidence is a little unrealistic. Unrest in the Middle East shook markets for a few days. President Trump carrying out strikes on Syria raises questions about his wider foreign policy and how he will proceed forward. Maybe its time to still be a little more conservative in our approach to investing. A rebalance of our investment portfolios could be...

President Trump’s First Week

First week for President Donald Trump and he has signed a dozen executive orders. Yes, it appears we are going to build that wall and maybe Mexico may pay for it or face a 20% tax on their imports. He has signed for the construction of two new oil pipelines which has been on the agenda for a decade. He has reduced the Regulatory burden on US manufacturers President Trump in his first week has received considerable criticism for his immigration policies and his trade protectionist policies. The US has had strong corporate earnings and traders on Wall Street like what they are seeing with President Trumps first week. The Dow Jones went through the 20,000 barrier. This will probably be good long term for our markets however our market this week will probably be slightly lower after trading on Friday in the US. The Market did not like some of President Trumps policies on immigration especially, and has reacted accordingly. This is what we will experience this year, the market reacting to executive orders and policies being...

Australian share market update

The Australian Share Market is still showing a weak performance being down last week by 1.7%. This was mainly due again to a weak performance in source stocks. Oil prices have weakened causing the energy sector to fall 5%. We are seeing mines in the Hunter area close due to a weakness in the mining services sector, and demand falling off. Resources were off 3.2% as commodity prices weakened further. Even though we have seen little growth in the building sector, building materials also...

Market outlook

While the share markets have recovered from previous weeks and US stock have mostly recovered, there was a dip on Tuesday due to energy and oil prices sliding. Further, the US trade deficit rose by 7.6% in September to $43 billion from August. This was up more than expected and was due to weak exports to Europe, China and Japan. While Australian share market has recovered from previous weeks’ lows, it still seems to be basically going sideways. Australian equities gained 2.2% last week and small caps 0.7% resources as expected were flat. China it seems will not meet its 7.5% target this year. The growth rate is likely to be 7%. There is evidence that there is jobs growth. Many of China’s industries such as automation, technology and telecom are still doing well. Sectors such as housing and heavy industry are still struggling and this will impact on the Australian economy. This means we need to be cautious on commodities and...