NEWS
9 Aug 2024 - Hedge Clippings | 09 August 2024
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Hedge Clippings | 09 August 2024 The result of this week's RBA board meeting came as no surprise given the CPI number from the week before, and the board's previous insistence that they were - or are still - "resolute in their determination" to curb sticky inflation which is stubbornly close to 4% whichever number you look at. As the RBA's statement's headline noted, "Inflation remains above target and is proving persistent," and a trimmed mean figure of 3.9% is way off the board's target of 2.5%. Not only way off numerically, but way off in the future as well, with the RBA's forecast that it will be December 2026 before the target will be met. In addition, the statement added another headline that "The outlook remains highly uncertain," which had the market's soothsayers basically writing off any chance of a rate cut this year. However, it could have been worse - the board gave strong consideration at their meeting to raising rates, which would have upset home owners with a mortgage, as well as the treasurer Jim Chalmers. Why so? The RBA indicated that the government wasn't helping, with tax cuts, support for wage rises, and energy support all contributing to the problem. But the Treasurer was quick to refute that - as he would. However, simple logic and facts tell you that while the RBA is trying to curb consumption, the government, with an election not too far away, are tipping money into consumers' pockets as fast as they can. It seems to us that the RBA and the government are pulling on different ends of the same rope. When Chalmers announced the appointment of Michele Bullock as the new RBA Governor last year, it was all smiles, generally at the expense of departing Governor Philip Lowe. Less than 12 months into her tenure, and there may be some gritted teeth behind his smile, but if he really expected any change in her approach he must have been deluding himself. Bullock has been at the RBA since 1985 and was deputy governor since 2022 under Lowe. At the time of her appointment Albo was quoted as saying "Ms. Bullock is eminently qualified to lead this national institution," although he was also quick to claim credit this week for getting inflation under control - sort of. On the radio interview we heard Albo was quick to change the subject away from inflation, moving to safer ground, namely Australia's medal tally at the Paris Olympics. In particular he was quite excited about Aussie success in the skateboarding and break-dancing, obviously pitching for younger voters in the upcoming election. Before that occurs (maybe even later this year) we're sure he'll be basking in reflected Olympic glory, either at the potential ticker tape parade through the streets or the inevitable reception at the Lodge on the athletes' return. News & Insights New Funds on FundMonitors.com The RBA's August decision: Insights from Nick Chaplin of Seed Funds Management | Seed Funds Management Market Update | Australian Secure Capital Fund Market Commentary | Glenmore Asset Management |
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2 Aug 2024 - Hedge Clippings | 02 August 2024
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Hedge Clippings | 02 August 2024 Central bankers love to use the term "a narrow path" as they manage their respective economies delicately between manageable growth, and the risk of recession. With the single tool of monetary policy to balance their twin objectives of inflation and employment, there's always the risk they move too quickly - or not quickly enough - and so miss the so called soft landing that the market craves. The US Fed looked as if they were on track to do that, but the market has become impatient. Just a day after Jerome Powell held rates steady but indicated they should be able to start easing in September, the ISM manufacturing index came in lower than expected, and at 46.8% indicating the economy was contracting. Suddenly the market's thinking bye-bye soft landing, hello possible recession. This couldn't come at a worse time for markets, particularly the NASDAQ and the Magnificent Seven, which were already seeing signs of a pull back from nosebleed valuation territory, coupled with concerns over reporting season - or at least missing analysts' estimates. Falls in the US of course lead to falls elsewhere, and Australia is no exception. To make matters worse the RBA has its own problems, although this week's CPI numbers have at least taken the pressure off them to raise rates at next week's meeting. Not that the CPI numbers were particularly good - June quarter up 1% and 3.8% over the past 12 months - they just weren't bad enough for the Board to raise rates on Tuesday as had been feared. One problem for the RBA is that Australia has a two speed economy - or at least two sections of the community that are faring very differently. At one end - say 20-25% - are doing it tough and struggling to make ends meet, and, as we hear continually, the government is doing everything it can to save, or at least support them - tax cuts, wage rises, energy and power support, etc. At the other end of the spectrum are those who have either paid off their mortgage, or at least paid it down to manageable levels, are comfortably retired, or are higher paid, and for whom inflation of 4%, and/or higher interest rates, aren't creating the same issue, partly because they're also beneficiaries of the government's generosity or stage 3 tax cuts. Of course there are those in the middle, and overall the average, who makes up the economy. It's the old conundrum: When your feet are in the freezer, and your head in the oven, your temperature is probably average. The next challenge for investors and fund managers reporting season in the US, and the ASX, where it runs through to the end of August. This is the period when Warren Buffett's famous quote "Only when the tide goes out do you discover who's been swimming naked..." comes into play. Missing market expectations - particularly when valuations are sky high - can result in savage sell offs. Overnight in the US Intel fell 17% after suspending its dividend, Snap also fell 17%, while Amazon fell 6% on disappointing quarterly sales and sales guidance in spite of net sales which are expected to grow by between 8% and 11% compared to Q3, 2023. Local hero, but NASDAQ listed Atlassian, fell 13% after close of trading, as its revenue projection is only for an increase of 16% this FY, having previously advised it would be 20% per year for 3 years. This week's edition of "The Last Word" covers all this and more. The Last Word In Episode 3 of "The Last Word", Chris Gosselin and Manny Anton delves into the latest market trends and economic developments. This episode covers key movements in the US, the impacts of recession fears on the US market, and the upended outlook for the US election following Joe Biden's withdrawal. News & Insights New Funds on FundMonitors.com Manager Insights | Argonaut Trip Insights: The US | 4D Infrastructure July 2024 Performance News Insync Global Capital Aware Fund |
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26 Jul 2024 - Hedge Clippings | 26 July 2024
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Hedge Clippings | 26 July 2024 The US economy picked up in the second quarter, rising 2.4% - buoyed by consumer spending on services, which in turn were supported by wage increases - up from 1.5% in January to March. Overall, 2nd Qtr GDP rose 2.8%, but with inflation subsiding it's looking as though the Fed could start cutting interest rates when they next meet. Given that FOMC meeting doesn't occur until September 25th, there's plenty of water to flow under the bridge by then, but virtually all (as in 82 out of 100) of the economists surveyed by Reuters in the States are predicting that outcome, and most are then expecting another cut before the end of the year. If that's the outcome - (and surely 82% of economists couldn't be wrong?) - then the FED would appear to have achieved the soft landing they've been aiming for. Closer to home, the outlook is not so clear, but at least we'll have an answer - like it or not - sooner when the RBA meets in early August. Between then and now we'll have CPI inflation figures for both the month of June, and the June quarter, both due next Wednesday, along with Retail Trade. Following that, and with plenty of time for the RBA to chew over them, will be June's Labour Force figures on Thursday, and both PPI and Household Spending on Friday. While locally economists aren't all in agreement on the need for a rate rise, there aren't any we've heard calling for a cut - unless you include the Treasurer Jim Chalmers, who one might suggest has his own agenda and motivation for doing so. As a result we expect that the RBA will still be trading that well worn, but increasingly narrow path, not helped of course by the government's support of above inflation wage rises, and their recent tax cuts. The Last Word This week's Hedge Clippings includes a new video segment, "The Last Word" which we'll be recording and distributing each Friday in conjunction with Finance News Network. We'll take an overall view of markets and global economic issues over the last week, along with politics, with a dash of customary cynicism as appropriate - or in some cases, probably inappropriate, as we try to end the week with literally, the last word. News & Insights Investment Perspectives: Why are we listening to central banks? | Quay Global Investors Attention shifting from inflation to the growth outlook | Magellan Asset Management June 2024 Performance News Bennelong Concentrated Australian Equities Fund Digital Income Fund (Digital Income Class) |
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19 Jul 2024 - Hedge Clippings |19 July 2024
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Hedge Clippings | 19 July 2024 Last week's Hedge Clippings' commentary (and the one before that) dealt almost exclusively with global politics and elections, and inevitably a focus on the US. As much as we'd like to think we were ahead of the curve, we can't claim access to any crystal ball, and the rest, as they say, is history. However, when it comes to US Presidents, a combination of history - 15 attempted assassinations since 1835, four successful - plus the polarising nature of the current campaign, one shouldn't really be surprised. Maybe those statistics give the answer to the question we've frequently asked: "How come in a country of 330 million, the only two candidates they can find are Trump and Biden"? Maybe not many of them like the odds! As we write, Joe Biden, seemingly one of a dwindling number of Democrats who think he should stand, is still in the race. Trump, rather than being deterred, is emboldened, as are his MAGA supporters as Trump is speaking at his party's nomination. A cynic would suggest he's milking last weekend's event for all it's worth among the Republican faithful, but what else would you expect? You have to give him points for presentation. Less excited about the potential for Trump's return would be Ukaine's Volodomyr Zelensky, Taiwan's Lai Ching Te, and quite possibly China's Xi Jinping, although the latter may think his task of enveloping Taiwan might now be easier. If nothing else, the next four years will be interesting. Enough of that! On to the economy... US inflation has fallen such that Fed Chair Powell has hinted they'll start cutting rates later this year, while at the same time the potential for the RBA to raise Australian rates at their upcoming August meeting is likely to be dependent on CPI data due on 31 July. The RBA's narrow path seems to be getting narrower, as inflation stays high, keeping interest rates high, which in turn have slowed Australia's two speed economy to a crawl. Far from a narrow path, the risk is we reach a tipping point. News & Insights 10k Words | July | Equitable Investors June 2024 Performance News Delft Partners Global High Conviction Strategy Bennelong Emerging Companies Fund Quay Global Real Estate Fund (Unhedged) Skerryvore Global Emerging Markets All-Cap Equity Fund |
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12 Jul 2024 - Hedge Clippings |12 July 2024
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Hedge Clippings | 12 July 2024 If there was one topic aside from inflation and interest rates that was set to dominate the news in 2024, it was going to be elections - or more importantly their outcome. 64 countries, plus the European Union, have held, or are due to hold elections this year, representing 49% of the world's population. You would expect therefore to say "Democracy Rules" - except it doesn't always apply. The potential for change in Russia (even though elections were held) was limited to say the least, as it was in Bangladesh, or Pakistan, where the most popular politician, Imran Khan, was in jail. Last week's UK election is another case in point: Democracy, of a sort, took place with an overwhelming vote of no confidence in the ruling Conservative government, although only 59% of the population thought it was worth the effort to vote on the day. Presumably a fair proportion of the 41% who didn't vote were still following the UK's WWll era slogan "Keep Calm and Carry On". Meanwhile, a fair proportion of the 61% who did vote will have to do the same for the next 4 years. However, the result was lopsided. While the winning Labour Party control 412 or 63% out of the total of 650 House of Commons seats, they received only 34% of the overall vote. Much of the skew can be blamed on the UK's system of first past the post voting - although if blame is to really be apportioned, Rishi Sunak and his 4 predecessors in 10 Downing Street should really shoulder it. This system saw 12.2% of the vote cast for the Liberal Democrats, who won 72 seats, while arch-spoiler Nigel Farage's Reform UK party out-polled the Lib Dems with 14.5% of the vote, but only won a paltry 5 seats for their efforts. As above, Democracy of a sort, but we have to admit better than that available - or not, depending on your view - in Putin's Russia, or for that matter Xi's China, where he was unanimously elected by almost 3,000 delegates of the National People's Congress last year. Australia's political system may not be perfect, but proportional representation, thanks to our preferential system, sure beats the heck out of the UK, let alone China and Russia! Which leads us to the looming election in the US, where earlier today Joe Biden was mumbling and bumbling his way through an hour-long news conference following the end of the NATO Summit commemorating its 75 years' existence (six years short of Joe's own age). In between slips of the tongue (mixing Putin with Zelensky, and for a moment naming Trump as his Vice President) Biden sounded more like he was at an election rally than a summary of the NATO deliberations. Meanwhile Trump, thanks to the US Supreme Court's ruling on presidential immunity, was busy filing an appeal against his conviction on criminal charges stemming from hush money paid to a porn star. Unless Biden has a change of heart, which it seems he's unwilling to do, one of them will end up as President of the free world come November. Whichever side of politics you're on in Australia, thank your lucky stars you're here! News & Insights Down-trading Megatrend | Insync Fund Managers Why invest in global equities | Magellan Asset Management June 2024 Performance News Bennelong Australian Equities Fund Glenmore Australian Equities Fund Bennelong Long Short Equity Fund |
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5 Jul 2024 - Hedge Clippings | 05 July 2024
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Hedge Clippings | 05 July 2024 This week we're going to start on politics, and then move on to the economy - or more specifically the outlook for inflation and interest rates. This is partly because last week's Hedge Clippings only touched on the US Presidential Debate as it was still underway as we were putting the finishing touches to our commentary, and partly because we underestimated how badly Biden had performed. We did comment that "early indications were Biden faltered badly on occasions," whereas it turns out even he admitted (finally) that it wasn't his greatest performance. You can say that again! Based on current polling it looks as if Trump (assuming Biden doesn't take the hint and pull out) will be heading back to the White House in early November, complete, thanks to a stacked Supreme Court ruling that gives a President immunity from prosecution for official acts while taken in office. On the face of it, that appears somewhat bizarre, but we have to admit we don't fully understand either US constitutional law (i.e. what constitutes "official") or, if it comes to that, the American political landscape. If we did understand the latter we'd be able to explain how a country, and a democratic one to boot, of 330 million people, only has a choice between Sleepy Joe - aged 81 and showing every bit of it - or the Donald - a convicted felon, confirmed philanderer, and well known golf cheat. The really unfortunate side of the lack of choice is that competition is good - and Trump in particular needs a strong opponent to keep him honest - or at least to call out his more dishonest claims. Assuming Trump wins in November, expect the unexpected. At least there'll be plenty of material for us on a weekly basis! Meanwhile the UK's initial election results are in, and the pollsters seem to have been absolutely spot on the money - much like Rishi Sunak's staff, who somehow thought it would be smart to have a punt on the date of an early election. In politics, much like any other confrontational battle, disunity is death. The fact that the Conservatives went through four Prime Ministers in five years, (Theresa May, Boris Johnson, Liz Truss, and finally Rishi Sunak) resulted in the inevitable. Given that Theresa May (PM 2016 - 2019) achieved some economic success (falling national debt, record employment, and income tax cuts for 32 million people) one could argue that her predecessor David Cameron has a lot to answer for by announcing a divisive and avoidable Brexit referendum dividing the nation (sound familiar?) and promptly quitting once the result was in. Although yesterday's election result was overwhelmingly in favour of a change of government, only time will tell if the UK's many problems are reversible, or if the downhill slope of the past 10 or more years can be reversed. Closer to home, Albo won't have been pleased with the distraction of one of his (now ex) senators crossing the floor, and subsequently leaving the government, just when he was wanting to focus on tax cuts for all, energy relief for all, and wage rises for all lower paid workers. We're not against these moves, but we doubt the RBA would have been overjoyed by their potential inflationary effects at a time that they're trying to curb demand, and tame inflation. The RBA would have been more pleased by household spending data released today by the ABS which showed an increase over 12 months to May of just 0.1%, with services up +2.3% while spending on goods fell -2.5%. Household spending has been trending down since September 2022, and when combined with June quarter CPI and retail trade data both due on the 31st of July will be a key part of the mix when the RBA next meets on the 6th and 7th of August. It will probably be too early at that stage to see the effects of the government's tax cuts and income support, but also too early to hope for a rate cut. News & Insights Market Commentary | Glenmore Asset Management Bull and bear case for Australian shares in the New Financial Year | Airlie Funds Management May 2024 Performance News |
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28 Jun 2024 - Hedge Clippings | 28 June 2024
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Hedge Clippings | 28 June 2024 Like it or not, this week's inflation figures confirmed an unpleasant reality: The RBA is now closer to raising rates than cutting them. Although it was only the monthly number, inflation inched up in April to 3.6%, from 3.5% in March, but then jumped to 4.0% in May. Seasonally adjusted, May's number is a tad higher at 4.1%; excluding volatile items, such as fruit, veg and fuel, also came in at 4.0% (actually down 0.1%), while the Annual Trimmed Mean figure jumped 0.3% to 4.4%. The RBA's task (although out of their direct control) might be helped by figures released yesterday showing job vacancies falling 2.7% in May, and are now down 26% since their post COVID peak in May 2022. That's it for the hard numbers, but where does it leave the RBA? Let's put it this way, the narrow path is getting narrower, to the extent we'd say they're more like walking a tightrope. The challenge for the RBA is that they have a two speed economy, or two sections (at least) of it, each of which is affected differently in the current economic times. Those on lower incomes, or reliant on assistance of some sort, are feeling the pinch, so the government is "splashing the cash" to save them. Meanwhile, more fortunate sections of the community, such as those with higher incomes, or possibly baby boomers enjoying the fruits of their previous labour, or those with the good management or fortune to have paid off their mortgage, have spending patterns that are relatively unaffected by inflation of 4%. So while the RBA is aiming on taming persistent inflation using the only tool at their disposal - trimming demand to match supply - their task is being made more difficult by a government that is trying to soften the inflationary blow, particularly for those less well off, and those hurting as a result of that inflation, including higher mortgage or rental costs, and sky high power bills. Hence Canberra's support for across the board wage increases for 2.6m lower paid workers, and tax cuts and power subsidies for all, each of which kick in from next Monday. In its effort to please those doing it tough, the government is not helping the RBA. Rather, it is helping to fuel inflation, whether it be via tax cuts or income support. That may be helping some people, but it is not helping the RBA. We were always taught that things work best when everyone pulls on the same rope, and in the same direction. This looks more like they're pulling from opposite ends. Which takes us back to the old saying, which according to the Bob Dylan song, can be attributed to Abraham Lincoln: "You can please some of the people all the time, or all of the people some of the time, but you can't please all of the people, all of the time." The government's dilemma is not helped by the fact that there's a countdown to an election due either next May (half Senate) or in September for the House of Representatives. So pencil in sometime between now and 24th of May next year for both. Albo will be desperate not to risk being remembered as a one-term wonder, so it was notable that Treasurer Jim Chalmers was this week spruiking a second successive budget surplus under a Labor government, while carefully avoiding to mention the impending fiscal cliff thereafter. Don't rule out an earlier date if they see things getting stickier. Of course, as pointed out by the new RBA Deputy Governor Andrew Hauser (a.k.a. the first central banker with a rare sense of humour) in this presentation to the Citi A50 Australian Economic Forum last night. While the board is limited to influencing demand via monetary policy, they take a wide range of data into account when making their decisions. First and foremost on the list though is inflation, so watch out for their next rate decision due on Tuesday 6th of August. By next week we may have a topic other than inflation and interest rates to consider. The first debate between Biden and Trump has just concluded, with early indications Biden faltered badly on occasions, but landed a strong blow with his accusation (presumably well practised) that Trump has the morals of an alley cat. Expect snippets of both to be repeated ad infinitum in respective TV ads between now and November. News & Insights 10k Words | Equitable Investors Australian Secure Capital Fund - Market Update | Australian Secure Capital Fund May 2024 Performance News Digital Income Fund (Digital Income Class) Emit Capital Climate Finance Equity Fund Insync Global Capital Aware Fund Insync Global Quality Equity Fund |
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21 Jun 2024 - Hedge Clippings | 21 June 2024
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Hedge Clippings | 21 June 2024 RBA's consistent message: Uncertainty abounds. There was nothing surprising in Tuesday's statement from the RBA, and definitely not the fact the cash rate was left on hold - again. Having run through what the key numbers were, or are - inflation, employment, wage growth, etc., the key message was "uncertainty" about pretty much everything. "The outlook remains highly uncertain" was the main section of the message, and the word uncertain cropped up multiple times, whether it be the outlook for inflation, economic growth, or consumption. Even "uncertainties regarding the lags in the effect of monetary policy" and then a "high level of uncertainty about the overseas outlook" and finally geopolitical uncertainties. Just in case anyone hadn't been listening to the RBA for the past three years or so, the bottom line was "returning inflation to target is the priority," with the RBA's nominated mid point target of 2.5% not expected for 2 years until the middle of 2026. As such, it's going to be a long haul, unless the economy drops in a hole (which it is close to doing), whereupon it's going to be a long and hard haul. Although the RBA mentioned overseas uncertainty, and specifically the geo-political risks in the Middle East and Ukraine, they didn't call out the potential for uncertainty surrounding the US presidential election in November. Not only is the outcome uncertain in what seems a close race between two candidates with an average age of 80, ( and only three years separating them which is about the only similarity between them), but in the event of a Trump victory, the uncertainty of what he will do - or what effect his policies will have, not only on America, but the rest of the world. Tariffs to replace taxes? Ending the Ukraine war in a day? Alienating European allies? Cancelling AUKUS? One wonders if the rhetoric is pure electioneering to or for the converted, or if he wins, will he follow through? Although anything is possible with Trump, uncertainty is certain. As for cancelling AUKUS, that might remove the quandary that the government has found itself in, by supporting nuclear powered warships for the Australian Navy, but not being prepared to entertain nuclear powered electricity. News & Insights New Funds on FundMonitors.com Remembering Daniel Kahneman | East Coast Capital Management Investment Perspectives: The opportunity in Canadian housing | Quay Global Investors May 2024 Performance News Skerryvore Global Emerging Markets All-Cap Equity Fund Quay Global Real Estate Fund (Unhedged) Bennelong Emerging Companies Fund |
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14 Jun 2024 - Hedge Clippings | 14 June 2024
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Hedge Clippings | 14 June 2024 US Inflation - Progress, but could do better Jerome Powell's comments on US inflation following the Fed's FOMC meeting this week sounded somewhat similar to Hedge Clippings' school reports all those years ago: "Making progress, but could do better..." seems to be a consistent theme in both. Luckily for the US economy and US consumers, the other regular comment - "must try harder" - can't be applied to Jerome's report card, or we'd be seeing the Fed's Dot Plot, (the members' expectations for the timing of the next interest rate move), trending upwards. As it is, the trend is still down, but the timing of any move is continually being extended. At the end of last year, the expectation was that the Fed would cut up to six times in 2024. By Easter, that had reduced to three, and here we are in June, half way through the year, and rates remain at a 23-year high for the seventh consecutive meeting, and with the dot plot indicating just one or possibly two cuts this year. The same applies to Australia, except the expectation is possibly for one downward move, or none. Of course, if the CPI number is bad, then as they've said in the past they won't hesitate to raise them. As the next CPI figure is not due until the last week in June, it is unlikely that the RBA will step out of line next Tuesday when they announce the result of their two days of deliberations, particularly this week's labour market numbers, described by the ABS as "relatively tight". As such the theme of Hedge Clippings' weekly commentary is likely to remain firmly fixed on inflation and interest rates, as it has been for the past couple of years. These themes have changed with the economic times, as COVID, deflation, the Hayne Royal Commission, QE, and prior to that the GFC, have each taken centre stage, with the occasional distraction provided by various politicians both home and abroad. This theme will change too in due course, to be replaced by who-knows-what? We have previously mentioned geo-political risk, but in spite of Ukraine, the South China Sea, and Palestine, these haven't derailed global economies - yet. One theme to watch which is lurking and brewing is the possibility of an impending global trade war, as the US and Europe become more protectionist, and China seeks an outlet for increasing industrial output, and to deflect the potential social unrest at home. Throw in a move to the right in Europe, an increasingly protectionist Biden, and/or change in the White House in November, and the theme may change. News & Insights Manager Insights | East Coast Capital Management May 2024 Performance News
Bennelong Australian Equities Fund Bennelong Concentrated Australian Equities Fund 4D Global Infrastructure Fund (Unhedged) Glenmore Australian Equities Fund Bennelong Long Short Equity Fund
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7 Jun 2024 - Hedge Clippings | 07 June 2024
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Hedge Clippings | 07 June 2024 Anyone waiting for the RBA to cut interest rates to mirror the downward movements in Europe and Canada would be well advised to be patient, in spite of Australia's GDP growth slowing to a crawl in the March quarter. In fact, GDP growth of +0.1% for the March quarter only just qualified as growth, and the household saving to income ratio fell to 0.9% from 1.6%. While the RBA is adamant that reducing inflation to their preferred 2-3% range is the number one target, the only possible change will come when (or if) there's a consistent downward movement from the present 3.6% level. That's only likely to occur if GDP turns negative and/or unemployment kicks upwards from the current 4.1% level, both or either of which will make the RBA's decision easier. As it is, they're walking a very fine line, with even the potential for a rate rise depending on the stimulatory effects from a combination of tax cuts, electricity bill relief, and wage increases announced, or just around the corner. More may be revealed following a speech by the RBA's newly minted Deputy Governor Andrew Hauser this afternoon, but we suspect he's going to stick to the script of inflation being the number one enemy, it's a narrow path, we know plenty of people are doing it tough, we're all in the same boat etc., etc., and sometime - possibly next year based on current forecasts - the Board will make a move - one way for the other. Hauser seems a revelation, fresh from the UK - a central banker with a sense of humour! Meanwhile, as indicated above based on Canada's and Europe's easing this week, there are signs of a gradual reduction of inflation and economic activity, possibly to be confirmed by a slowdown in US payroll figures (due tonight) if a Bloomberg survey of economists is anything to go by. Even if the economic forecasters have got it right, that's still not a guarantee that the US Fed will fall in behind Canada and the EU, although it will increase expectations. Inflation remains the name of the game, and the real risk remains that, excluding a recession, it will remain sticky or elevated, while economic growth gradually declines. On the political front India's election provided an unexpected result as PM Modi will only be able to form a coalition government. In the UK there seems to be a political shambles (nothing changes) but with the outcome a foregone conclusion and only the final numbers in doubt, while in the US there's increasing speculation (in the Murdoch press at least) that Joe Biden may not make it to the first presidential debate, let alone the poll on November 5th. News & Insights Manager Insights | Digital Asset Funds Management Market Update | Australian Secure Capital Fund Innovations shaping the global healthcare universe | Magellan Asset Management |
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