The highlight of the coming week will no doubt be Thursday’s labour force report. Given the notorious volatility in monthly employment changes, the single best measure of labour market trends remains the unemployment rate. As seen in the charts below, the unemployment rate has been broadly trending lower since late-2014, which has been consistent with
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The equity market is (relatively) cheap! The extra-ordinary decline in local bond yields has now left the Australian equity market relatively cheap compared to bond markets. Despite the S&P/ASX 200’s price-to-forward earnings ratio reaching a relatively high 16.1 at end-June (compared to an average of 14.2 since 2002), slumping bond yields have caused the so-called
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The seemingly imminent passage through Federal Parliament of extensive income tax cuts over the coming few years is a welcome reform, as it will give back substantial “tax drag” that has accumulated in recent years and help lower marginal income tax rates for many Australians. Tax Drag As seen in the chart below, growth in
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Reading time: 5 minutes Key Market Trends – bond-driven equity rally May’s US-China trade fears gave way to central bank easing hopes in June, with a further decline in bond yields helping power a rebound in global equity markets. New dovish signals from the US Federal Reserve saw the $US weaken while the $A firmed
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Reading time: 4 minutes Video: Quick highlights Key Market Trends A resumption of US-China trade tensions saw global equities pull back in May, with the MSCI All-Country World Index declining by 5.7% in local currency terms. As seen in the chart below, this continues the broadly choppy performance of equity markets since early 2018, reflecting
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Reading time: 5 minutes The re-election of the LNP Morrison Government appears to be providing a timely “shot in the arm” for the Australian share market. This note suggests the ensuing policy certainty with regard to taxation is also particularly beneficial to high-yielding local shares able to offer attractive franking credits. Certainty around dividends and
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Reading time: 4 minutes Following a “V-shaped” recovery from the sharp market sell-off late last year, US equities now face a reality check as we head into the Q1 earnings reporting season. Although early earnings results have broadly met expectations, there seems more downside than upside risk to the earnings outlook as this year progresses.
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Reading time: 5 minutes With global growth slowing there is understandable concern that the decade long global bull market could be finally coming to an end. This note suggests, however, that bear markets still remain a relatively rare occurrence, and even rarer in the absence of a US recession. Equity markets are inherently volatile
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Reading time: 4 minutes Hybrid securities last year again demonstrated their ability to hold up well in the face of equity market volatility. Hybrids: impressive risk-adjusted returns The Investment Manager of our Active Hybrids Fund (ASX: HBRD) recently wrote a post discussing the strong performance of the hybrids market last year. Indeed, the index of
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Reading time: 3 minutes History suggests that so-called “quality” companies, i.e. those with a high return on equity (or “ROE”), tend to be able to produce market-beating shareholder returns over time. As this note details, moreover, quality companies have tended to especially outperform in “late-cycle” market periods, as investors have tended to gravitate toward companies
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