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Market Updates

For some years now Modern Monetary Theory (MMT) has been gaining prominence as a solution to the perceived failure of traditional economic policies to achieve full employment & meet inflation targets, despite at or near zero interest rates.
November 26th 2020
Australia continues to perform better in “controlling” coronavirus, it has a stronger economic support policy response, its major trading partners in Asia are in better shape, the drag from the mining bust is over and it should benefit from a cyclical global recovery in 2021.
November 19th 2020
Contrary to what would normally be suggested by the worst recession since the 1930s, high unemployment, the worst riots since 1968 and the poor handling of the coronavirus pandemic Donald Trump performed very well in the US presidential election resulting in a close outcome. However, while counting is still continuing in some key states, major US TV networks and Associated Press have called the result in Biden’s favour and he has claimed victory as it looks highly likely he will secure at least the 270 electoral college votes required to win and possibly 306
November 9th 2020
The RBA has cut the cash rate to a record low of 0.1% & announced a broad-based quantitative easing program. While the economic boost is likely to be small compared to that provided by the recent Budget, the further reduction in borrowing costs will support household & corporate finances and housing demand as well as keep the $A lower than would otherwise be the case.
November 3rd 2020
From the get-go back in March, as coronavirus lockdowns hit, there has been much debate about what this recession would be like: how deep and long would it be? Was it going to be a recession like those in decades past or more like the Great Depression of the 1930s? Would it look like a V, a U, a W or an L? Or even a K, square root or a swoosh? These questions gained added currency when actual data showed a bigger hit to economies than what was seen at the end of WW2 or the Great Depression and then confusion reigned as much data showed very steep rebounds.
October 29th 2020
Despite a 35% or so plunge in share markets earlier this year; on the back of the pandemic and rough patches in 2018, 2015 and 2011, well diversified Australian investors have seen pretty good returns over the last 10 years. The median balanced growth superannuation fund returned 5.8% pa over the five years to August and 7.3% pa over 10 years and that’s after fees and taxes. While that’s dull compared to the double digit returns of the higher inflation world of the 1980s and 1990s, it’s pretty good once low inflation of 2% pa or less is allowed for.
October 21st 2020
As an investor its very easy to get thrown off by the ever-present worry list surrounding investment markets that relate to economic activity, profits, interest rates, politics, etc. Or by the perennial predictions of an imminent crash. Or by talk of the next best thing that’s going to make you rich.
October 15th 2020
The 2020-21 budget is a long way from the 2019-20 “back in black and back on track” budget. Last year, it was all about delivering the long-awaited budget surplus. This year it’s all about spurring recovery.
October 7th 2020
The US election has significant potential to add to volatility in investment markets. A Trump victory will mean more of the same and would likely initially be more positive for US than global and Australian shares.
September 30th 2020