Market Movements and Economic Review – December 2024
While headline inflation eased to 2.8% in the September quarter, the RBA appears cautious on interest rates.
The RBA Governor stated that Australia’s core inflation remains too elevated to justify interest rate cuts in the near term.
The sharemarket reacted to the RBA’s comments in the last days of a month that had seen several all-time highs as markets globally positively reacted to Donalds Trump’s win.
Click the video link below to view our update.
Market movements and review video – December 2024
Market Movements and Economic Review – November 2024
Welcome news on the inflation front in October pointed to the Reserve Bank of Australia (RBA) holding steady on rates this month.
The latest quarterly inflation figures show inflation has slowed to its lowest level since the height of the pandemic and now sits within the RBA’s target range at 2.8%.
Global share markets softened in the final two weeks of October, reflecting economic and geopolitical uncertainly.
The S&P/ASX 200 closed slightly down over the month of October, after again reaching record highs mid-month.
With the US election on the horizon there is much speculation about what that will mean for markets and the economy, both in the US and Australia.
Click the video below to view our update.
Market movements and review video – November 2024
Market Movements and Economic Review – October 2024
Interest rate speculation is rife after the Reserve Bank of Australia (RBA) kept rates on hold at 4.35% last month.
RBA Governor Michelle Bullock believes it may be “some time” before inflation is “sustainably in the target range”, with concerns about inflation, excess demand, low productivity, and a still tight labour market.
The S&P/ASX 200 reached a new record high, up 2.2% for the month and 7.89% for the year, reflecting global optimism on the macro-economic front.
Click the video below to view our update.
Market movements and review video – October 2024 (eread.com.au)
Market Movements and Economic Review – September 2024
Global stock markets – including the ASX – largely stabilised by the end of August after a turbulent month.
It was a rocky start when markets everywhere fell after news of high unemployment figures in the US and an interest rate move by Japan’s central bank.
Click the link below to view our video update.
Market movements and review video – September 2024 (eread.com.au)
Market Movements and Economic Review – August 2024
While the anxiously awaited release of the latest inflation data at the end of July, showed an increase, it was in line with economists’ predictions.
Given the RBA wants inflation back within a 2-3% target range by the end of 2025, there were concerns about the inflation figures and the implications for the cash rate.
The ASX finished the month strongly with an increase of around 4%, riding out a mid-month plunge and surging to a record high for the ninth time this year.
Click the video below to view our update.
Market movements and review video – August 2024 (eread.com.au)
Market Movements and Review July 2024
Despite some signs of a weakening economy with stalling growth and a softening labour market, persistently high inflation is acting as a roadblock to the RBA’s possible rate cuts.
Markets have now priced in a risk that the RBA could hike rates as soon as the next meeting in August.
Australian shares finished the month close to where they started, with investor sentiment influenced by news of higher inflation and fears of another interest rate hike.
Click the video below to view our update.
Market movements and review video – July 2024 (eread.com.au)
Market Movements and Review June 2024
The run of stronger-than-expected domestic inflation figures continued in May.
The higher-than-expected inflation figures saw Australian shares tumble after reaching a welcome high mid-month.
The ASX200 finished the month on a positive note, slightly higher for the month of May.
Click the video below to view our update.
Market movements and review video – June 2024 (eread.com.au)
Market Movements and Review – March 2024
Inflation has continued to cool over January, and while the economy is slowing, we still have relatively low unemployment and this has provided support for Australian shares throughout February.
The lower than anticipated inflation figures fuelled optimism at the end of the month, for the possibility of earlier cuts in domestic interest rates.
Click the link below to view our video update.
Market movements and review video – March 2024 (eread.com.au)
Market Movements and Review – January 2024
Cooling inflation and a strong economy with relatively low unemployment has sent investors back to Australian shares towards the end of January.
The lower than anticipated inflation figures fueled optimism at the end of the month, for the possibility of earlier cuts in domestic interest rates.
Click the link below to view our video update.
Market movements and review video – January 2024 (eread.com.au)
2023 Year in Review: Defying Predictions
Australia’s economy stubbornly defied predictions during 2023, dashing any hopes that we might begin to return to some kind of normal.
Some had expected an end to the Reserve Bank’s continued cash rate rises during the year. Instead, inflation has been a stubborn foe and we saw five rate rises, adding another 1.25%. But there was good news for property investors with a small increase in prices in some cities.
On another positive note, superannuation funds bounced back after losses in 2022.
The RBA expects economic growth to remain subdued but resilient in 2024, largely supported by construction and infrastructure work. Meanwhile the rebound in international students and tourism is expected to contribute to robust growth in consumer spending. The RBA is also confident that inflation will continue to fall slightly throughout the year, but many predict at least one more cash rate increase during the year.
We hope that you enjoy this and if you have any questions, please don’t hesitate to contact us.
2023 Year in Review (eread.com.au)
Market Movements and Review – December 2023
November started off as volatile as October but some better-than-expected inflation figures, globally, assisted the stock market to gain some ground. The local share market finished November up 4.5 per cent, representing a strong gain after 3 months of losses.
Investors are continuing to keep a close eye on oil price movements over fears of an escalation of conflict in the Middle East.
Click the link below to view our video update.
Market movements and review video – December 2023 (eread.com.au)
Market Movements and Review – November 2023
October was a volatile month on the global stock markets and in Australia. The local share market finished October down 3.8 per cent, representing a third straight month of losses.
Investor sentiment reflected heightened anxiety regarding inflationary pressures and uncertainty over rate rises, mixed economic data and concerns about the Israel-Hamas conflict.
Investors are continuing to keep a close eye on oil price movements over fears of an escalation of conflict in the Middle East.
Click the link below to view our video update.
Market movements & review video – November 2023 (eread.com.au)
Market Movements and Review – June 2023
Please find the link below to the latest economic and market update.
Market movements & review video – July 2023 (eread.com.au)
Our July update video also takes you through key economic indicators so you can understand how the Australian economy and markets are faring. The latest figures show that inflation is starting to moderate overall with a sharp downturn in June and the question is if they RBA will stop the rate rises for now or continue until the inflation genie is totally back in the bottle. Considering that we have had a 4% rise in official interest rates from May last year, investments markets (in particular shares) have held up well, albeit with a large level of volatility due to continued and persistent inflation, bank failures and geopolitical risks.
Market Movements and Review – June 2023
Please find the link below to the latest economic and market update.
Market Movements & Review video – June 2023 (eread.com.au)
Our June update video also takes you through key economic indicators so you can understand how the Australian economy and markets are faring, including the sharp increase in inflation that has come through over 2022 (not only in petrol prices but across the board) and the subsequent slowdown in inflation over recent months. The latest figures show that inflation is starting to moderate overall but there was a re-acceleration in May and the question is if the RBA will stop the rate rises for now or continue until the inflation genie s back in the bottle. The recent bank failures in the US as well as Credit Suisse rattled markets in March but swift action from the regulators seems to have avoided further contagion for now.
2023 Federal Government Budget – Summary
Please find attached a summary that we have put together in relation to the 2023 Federal Government Budget that was released last night by Treasurer Jim Chalmers.
While the first budget surplus in a decade and a half is to be celebrated, the joy will be short-lived. By next year’s budget, it’s expected there will be a return to small deficits for the next few years.
That’s because the global economy is slowing thanks to persistent inflation and higher interest rates. Aside from the pandemic and the 2007 Global Financial Crisis, the next two years are expected to be the weakest for global growth in more than two decades.
As a result, the government expects Australia’s economic growth to slow from 3.25 per cent in 2022-23 to just 1.5 per cent the following year, before recovering a little to 2.25 per cent.
In this environment, the treasurer continues to mark inflation as the government’s primary economic challenge. He says that is why the budget is “calibrated to alleviate inflationary pressures, not add to them”.
The good news is that the Reserve Bank says inflation is falling slightly faster than it had first forecast and has now passed its peak.
It is expected to be around 4.5 per cent by the end of the year, a long way from last year’s CPI rate of 7.8 per cent.
Federal Budget 2023-24 Analysis (eread.com.au)
Market Movements and Review – May 2023
Please find the link below to the latest economic and market update.
Market movements & review video – May 2023 (eread.com.au)
Our May update video also takes you through key economic indicators so you can understand how the Australian economy and markets are faring, including the sharp increase in inflation that has come through over 2022 (not only in petrol prices but across the board) and the subsequent slowdown in inflation over recent months. The latest figures show that inflation is starting to moderate and the question is if they RBA will stop the rate rises for now or continue until the inflation genie is back in the bottle. The recent bank failures in the US as well as Credit Suisse rattled markets in March but swift action from the regulators seems to have avoided further contagion for now.
8 retirement mistakes and how to avoid them
Retirement is a phase of life most of us look forward to. It’s a chance to pursue other interests, travel and maybe do some part-time work or volunteering.
Thanks to more than 30 years of compulsory superannuation, we are also retiring with more savings than previous generations and have higher expectations of the lifestyle we wish to enjoy. But that also brings its challenges.
According to the government’s Retirement Income Review, the average age of retirement in Australia is around the ages of 62 to 65. At the same time, today’s 65-year-old men and women can expect to live to 85 and 88 respectively, on average, and many will live well into their 90s.
To make the most of your retirement years, it’s important to have confidence that your savings will last the distance. The best way to achieve that is to have a plan that will help you avoid some common and preventable retirement mistakes.
Please click the link below for more information:
8 retirement mistakes and how to avoid them (eread.com.au)
If you have any questions please don’t hesitate to get in touch with us.
Market Movements and Review – February 2023
Please find the link below to the latest economic and market update.
Market movements & review video – February 2023 (eread.com.au)
Our February update video takes you through key economic indicators so you can understand how the Australian economy is faring, including the sharp increase in inflation that has come through over 2022 (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, its significantly lower than in most of the rest of the world. Inflation seems to have peaked in the US as interest rates are starting to have an impact but also in Australia, as retail sales fell for the first time and inflation, while still high, is not rising as fast as it was. 2022 was a challenging year for markets but January 2023 was one of the best return months in recent memory with the ASX itself up almost 8%. This will most likely not continue as we still have high levels of volatility, but as we always say, look through the noise, and focus on the long term.
Lookback to 2022 – a challenging year
Please find the link below to read our “2022 Year in Review” paper.
2022 Year in Review (eread.com.au)
The year began on an optimistic note, as we finally began to emerge from Covid restrictions. Then Russia threw a curve ball that reverberated around the world and suddenly people who had never given a thought to the Reserve Bank were waiting with bated breath for its monthly interest rate announcements.
Even though investors have come to expect unpredictable markets, nobody could have predicted what unfolded in 2022. Russia’s invasion of Ukraine in February triggered a series of unfortunate events for the global economy and investment markets. It disrupted energy and food supplies, pushing up prices and inflation. Inflation sits around 7 to 11 per cent in most advanced countries, with Australia and the US at the low end of that range and the Euro area at the higher end. As a result, central banks began aggressively lifting interest rates to dampen demand and prevent a price and wages spiral.
Please have a read our 2022 review note by clicking the link above and as always if you have any questions please don’t hesitate to contact us.
Market Movements and Review – January 2023
Please find the link below to the latest economic and market update.
Market movements & review video – January 2023 (eread.com.au)
Our January update video also takes you through key economic indicators so you can understand how the Australian economy is faring, including the sharp increase in inflation that has come through over 2022 (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, its significantly lower than in most of the rest of the world. Inflation seems to have peaked in the US as interest rates are starting to have an impact but also in Australia, as retail sales fell for the first time and inflation, while still high, is not rising as fast as it was. 2022 was a challenging year for markets, with stock, bond and property all finishing in negative territory with the US stock and bond markets (combined) having their worst year since the 1870’s!
Market Movements and Review – December 2022
Please find the link below to the latest economic and market update.
Market movements & review video – December 2022 (eread.com.au)
Our December update video also takes you through key economic indicators so you can understand how the Australian economy is faring, with the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, its significantly lower than in most of the rest of the world. Inflation seems to have peaked in the US as interest rates are starting to have an impact but also in Australia, as retail sales fell for the first time and inflation, while still high, is not rising as fast as it was.
Market Movements and Review – November 2022
Please find the link below to the latest economic and market update.
Market movements & review video – November 2022 (eread.com.au)
Our November update video also takes you through key economic indicators so you can understand how the Australian economy is faring, with the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, it’s significantly lower than in most of the rest of the world.
Federal Budget
Last night, the Federal Treasurer, Jim Chalmers, delivered the first Labor Budget in almost a decade.
While there were no major surprises in the budget three things stood out for us:
- An
increase in electricity bills by up to 56% (not the $275 saving promised
prior to the last election) over the next 2 years – adding to cost of
living pressures - A
change to the tax treatment of off-market share buy-backs undertaken by
listed public companies aligning this with the treatment of on-market
share buy-backs. This measure will apply from announcement on Budget night
(7:30pm AEDT, 25 October 2022) – we don’t have any clarity on what this
means – hopefully we get more detail in the coming days, but this will
affect all investors (whether you hold shares directly, via superannuation
or via a managed Australian share fund). - A
$20 billion fund to be established to help the transformation to “net
zero” – however this is off the governments balance sheet – and given the
opaqueness of the off-balance sheet item, there are considerable
uncertainties as to the timing and the ultimate cost of achieving net
zero.
We have a summary of the major announcements made in the Budget, you can read this by clicking the link below:
Federal Budget 2022-23 Analysis (eread.com.au)
Market Movements and Review – October 2022
Please find the link below to the latest economic and market update.
Market movements & review video – October 2022 (eread.com.au)
Our October update video also takes you through key economic indicators so you can understand how the Australian economy is faring, with the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, its significantly lower than in most of the rest of the world.
Putting Recent Returns into perspective
While 2021-2022 may not have been a stellar year for the majority of investors, it’s worth remembering that the worst performing asset class one year can be the best the next, and vice versa. That’s why successful investing benefits from having a good balance.
The last financial year, particularly the first half of 2022, saw a sharp rise in volatility on global investment markets.
It was hardly surprising. Stock markets, bond markets, commodities markets, and currency markets all found themselves caught up in a turbulence, shaped by a series of unsettling events.
They included the ongoing spread of COVID-19, with China forcing many of its major cities and manufacturing hubs back into lockdowns, and the start of the Russia-Ukraine war this year.
Inflation levels were already starting to rise in the second half of 2021, but the combination of these events has intensified the pressure on already strained global supply chains in 2022.
With the prices of goods and services rising at their fastest pace in decades, central banks have quickly begun raising their official interest rates in a bid to dampen demand.
Reflecting the stormy conditions – and the widespread sell-offs on financial markets over recent months – most investment asset classes recorded losses over the 12 months to 30 June.
You can read more on this here: Putting recent returns into perspective (eread.com.au)
Market Movements and Review – September 2022
Please find the link below to the latest economic and market update.
Market movements & review video – September 2022 (eread.com.au)
Our September update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from COVID-19 and the continued re-opening of our economy, the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, it’s significantly lower than in most of the rest of the world.
Market Movements and Review – August 2022
Please find the link below to the latest economic and market update.
Market movements & review video – August 2022 (eread.com.au)
Our August update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from COVID-19 and the continued re-opening of our economy, the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, it’s significantly lower than in most of the rest of the world.
How to manage rising interest rates
Rising interest rates are almost always portrayed as bad news, by the media and by politicians of all persuasions. But a rise in rates cuts both ways.
Higher interest rates are a worry for people with home loans and borrowers generally. But they are good news for older Australians who depend on income from bank deposits and young people trying to save for a deposit on their first home.
Rising interest rates are also a sign of a growing economy, which creates jobs and provides the income people need to pay the mortgage and other bills. By lifting interest rates, the Reserve Bank hopes to keep a lid on inflation and rising prices. Yes, it’s complicated.
Hopefully the article below sheds some light on this, please click on the link:
How to mange rising interest rates (eread.com.au)
Market Movements and Review – July 2022
Please find the link below to the latest economic and market update.
Market movements & review video – July 2022 (eread.com.au)
Our July update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from COVID-19 and the continued re-opening of our economy, the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). We are in this higher inflation and higher interest rate environment and the Reserve Bank will continue to hike rates which will have an impact on asset prices, like shares and property but it is important to note that while inflation in Australia has gone up, it’s significantly lower than in most of the rest of the world.
Market Movements and Review – June 2022
Please find the link below to the latest economic and market update.
Market movements & review video – June 2022 (eread.com.au)
Our June update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from the COVID-19 induced slowdown due to the omicron variant (and the continued lockdowns in China, which affect us through higher inflation) and the continued re-opening of our economy, the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). Important to note that while inflation in Australia has gone up, it’s significantly lower than in most of the rest of the world. And for the first time in almost a decade we will now have a left-wing government in Australia following Labor’s win in the recent Federal Election as Anthony Albanese has now been sworn in as PM.
Market Movements and Review – May 2022
Please find the link below to the latest economic and market update.
Market movements & review video – May 2022 (eread.com.au)
Our May update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from the COVID-19 induced slowdown due to the omicron variant (and the continued lockdowns in China, which affect us through higher inflation) and the continued re-opening of our economy, the war in Ukraine that began in late February and the sharp increase in inflation that has come through (not only in petrol prices but across the board). Important to note that while inflation in Australia has gone up, its significantly lower than in most of the rest of the world.
May 2022 Snapshot
It’s May and while the weather is cooling, the economic and political landscape is heating up. All eyes are on interest rates as the federal election campaign shifts into top gear ahead of the May 21 polling day.
In uncertain times like these, when investment markets are volatile, it’s tempting to switch to cash or bury your head in the sand. If history is any guide, neither approach will end well. In this snapshot we look at the investment outlook for shares, the likely winners and losers in the current environment and the rewards for staying the course.
You can read our May snapshot here à The road ahead for shares (eread.com.au)
Market Movements and Review – April 2022
Please find the link below to the latest economic and market update.
Market movements & review video – April 2022 (eread.com.au)
Our April update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from the COVID-19 induced slowdown due to the omicron variant and the continued re-opening of our economy and the war in Ukraine that began in late February.
2022-23 Federal Budget Analysis
Billed as a Budget for families with a focus on relieving short-term cost of living pressures, Treasurer Josh Frydenberg’s fourth Budget also has one eye firmly on the federal election in May.
At the same time, the government is relying on rising commodity prices and a forecast lift in wages as unemployment heads towards a 50-year low to underpin Australia’s post-pandemic recovery.
Please click on the link below to read our analysis of the Federal Budget.
Federal Budget 2022-23 Analysis (eread.com.au)
Economic Update – February 2022
Please find the link below to the latest economic and market update.
Market movements & review video – February 2022 (eread.com.au)
Our February update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from the COVID-19 induced slowdown due to the omicron variant and the continued re-opening of our economy.
Economic Update – November 2021
Please find the link below to the latest economic and market update.
Market movements & review video – November 2021 (eread.com.au)
Our November update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from the COVID-19 induced recession of 2020 as well as the continued opening of the economies of NSW and Victoria.
Economic Update – August 2021
Please find the link below to the latest economic and market update.
Market movements & review video – August 2021 (eread.com.au)
Our August update video also takes you through key economic indicators so you can understand how the Australian economy is faring as we recover from the COVID-19 induced recession of 2020, as well as the latest lockdowns across the Eastern Seaboard.
2021-2022 Federal Budget Analysis
In his third and possibly last Budget before the next federal election, Treasurer Josh Frydenberg is counting on a new wave of spending to ensure Australia’s economic recovery maintains its momentum.
As expected, the focus is on jobs and major new spending on support for aged care, women and first-home buyers with some superannuation sweeteners for good measure.
With the emphasis on spending, balancing the Budget has been put on the backburner until employment and wages pick up.
You can read our analysis here: Federal Budget 2021-22 Analysis (eread.com.au)
If you have any questions please don’t hesitate to contact us.