Key points A serious second wave of coronavirus cases in major developed countries is the biggest risk facing equity markets, and one investors will need to watch closely. However, provided any second wave is relatively mild in terms of pressure … Continue reading →

Key points The strong rally in shares since their March lows reflects a combination of economic reopening, signs of recovery, policy stimulus and once pessimistic investors closing underweight or short positions. Shares are vulnerable to a short-term consolidation or pullback. … Continue reading →

Key points Australia capital city home prices fell -0.5% in May. Significant policy support & the earlier reopening of the economy have made our worst-case scenario for a 20% decline in average Australian house prices unlikely. However, our base case … Continue reading →

Key points Key medium to longer-term implications flowing from the coronavirus shock are: lower for longer interest rates; a further blow to globalisation; another leg up in the US/China cold war; bigger government and public debt; a long-term risk of … Continue reading →

Key points Australia’s federal budget deficit is expected to peak at around $200bn in 2020-21, or around 10% of GDP which will be the highest since the end of WW2. This will see net public debt nearly double as a … Continue reading →

Key points Australia has performed better than many countries in “controlling” coronavirus, it has a stronger economic policy response & its major trading partner is 2-3 mths ahead of the rest of the world into economic recovery. If, as a … Continue reading →

Key points As we’ve seen recently growth assets like shares have periods of bad short-term performance versus bonds & cash. But they provide superior long-term returns which is essential to grow retirement savings. It makes sense for superannuation to have … Continue reading →

Key points After a strong rally, in the short-term shares are vulnerable to bleak economic and earnings news. However, positive news on the coronavirus outbreak is starting to get the upper hand – with evidence of curve flattening, an easing … Continue reading →

Key points Central bank support to ensure the flow of money and credit through economies is an essential part of the global and Australian coronavirus economic rescue. This has increasingly involved quantitative easing which entails the printing of money. Higher … Continue reading →

Key points While shares have rallied 15-20% from their March low and may have started a bottoming process, it’s still too early to say with confidence we have seen the low for this bear market. Key signposts to watch for … Continue reading →

Key points Significant government support is essential to enable parts of the economy to successfully hibernate. This will be financed by borrowing and is affordable given Australia’s relatively low public debt and low borrowing rates. Central bank support to keep … Continue reading →

Key points Global share markets have fallen into a bear market, but whether this turns out to be long or short depends on how long the hit to the economy from coronavirus lasts. There are big differences between the current … Continue reading →

Key points The Australian housing market is at risk from the coronavirus recession Australia has now entered. A relatively short recession that sees unemployment rise to around 7.5% would likely only set prices back around 5% or so after which … Continue reading →

Key points Successful investing can be really difficult in times like the present with immense uncertainty around the impact of coronavirus on the outlook. This makes it all the more important to stay focussed on the basic principles of successful … Continue reading →

Key points The rout in financial markets has continued, on the back of coronavirus, made worse by a flow on to oil markets. The risk of a deeper hit to economic activity has risen. Key things to watch are the … Continue reading →