Short Shorts
Lithium miner Orocobre is now the most shorted stock on the ASX, having taken over from Myer and Aconex in the past few weeks.
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Yellen vs. Trump
The reason the rate hike announced by the Federal Reserve this week became so certain, so early, is that after it raised rates in December, financial conditions actually became looser, not tighter.
Read More544 Days Of Turnbull
Yes, coming up for 18 months since he toppled T. Abbott. It seems like only yesterday doesn’t it?
Read MoreKohler’s Overview – Inside The GDP Numbers
The best and worst thing about this week’s national accounts was the strength in consumer spending – household consumption contributed 0.5% of the 1.1% GDP growth number for the December quarter.
Read MoreAlan Kohler’s Overview
Australian Economy
Read MoreKohler’s Overview – CBA: Not Bad, Not Cheap, Not Expensive
I thought the Commonwealth Bank’s result this week was really impressive: net interest margin was squeezed but cost control resulted in a solid 3.5% lift in the bottom line.
Read MoreKohler’s Overview – China, The Belt and Road Initiative
In my The Money Café chat with James Kirby this week we were moaning about all the uncertainty and instability in Europe and America and I observed: “Thank goodness Australia’s future is tied to a communist dictatorship. Stability plus!”
Read MoreKohler’s Overview – Algorithmic Minefield
The sharemarket is like a game of football in a minefield these days, with explosions going off regularly and investors in specific stocks getting blown to bits just as they thought they were about to kick a goal.
Read MoreKohler’s Overview – US Equities Stretched
The Dow Jones passed 20,000 for the first time at 1.30am on Australia Day (our time) and stayed there the following day. The rally continues.
Read MoreKohler’s Overview – Australian Economy
It’s pretty clear that US and global issues will dominate this year, but separately, there’s a big transition going on in Australia too.
Read MoreKohler’s Charts – Small Ordinaries Index
The shifts between small caps and large caps this year have been massive. In August the Small Ordinaries Index had outperformed the 20 Leaders by almost 20%, but four months later that has been largely reversed.
Read MoreKohler’s Charts – Australia’s Federal Budget
The Treasurer, Scott Morrison, releases the Mid-Year Economic and Fiscal Outlook (MYEFO) this week, and if anything, there’s more pressure on him now than when he brought down the main budget in May.
Read MoreKohler’s Charts – US Dollar Flexes Its Muscles
The US dollar surged again on Thursday after the Fed raised rates for the second time, and also raised the forecasts for next year. It’s now up 6% since before the US election.
Read MoreKohler’s Charts – Data Defies Trump Gloom
Last Tuesday, the President-elect Donald Trump declared that “we’re living through the greatest jobs theft in the history of the world”, which sits rather oddly with today’s chart, showing that the US is basically at full employment – that is, that the unemployment rate has arrived at the statistical “natural rate”.
Read MoreKohler’s Charts – Key Takeaways From The GDP Read
A couple of key points from this week’s national Accounts, which showed the first contraction in GDP since 2011.
Read MoreKohler’s Charts – National Accounts Week
It’s National Accounts week, and so far the signs are that GDP for the third quarter will be weak – not minus, but not much either.
Read MoreKohler’s Charts – Italy Votes
Italy’s big referendum happens next Sunday. It’s about reducing the powers of the Senate to streamline the operation of government, but it has become a referendum on Prime Minister Renzi’s leadership and, in many eyes, on Italy’s membership of the EU.
Read MoreKohler’s Charts – Australia’s Many Housing Markets
If you hear anyone talking about “the housing market”, ask them “which one?” Australia DOES NOT have a housing market – it has many, and they are very different, as this chart from HSBC shows.
Read MoreKohler’s Charts – Commodities & The A$ Diverge
The Aussie dollar broke below US74c and is clearly the thing to watch this week as markets continue to digest the result of the US election.
Read MoreKohler’s Charts – Break Between Bonds And Equities
This chart from Chris Watling of Longview Economics shows a huge break between bonds and equities since the US election – bond prices have accelerated their declines while shares, at least in the US, have turned sharply.
Read MoreKohler’s Charts – Housing Investors Get Their Mojo Back
Investors get their mojo back. As the prospect of interest rate rises stretches further and further away, investors are taking advantage of the low cost of finance to buy more and presumably more expensive houses. And they’re about to finish the real estate year on a high. So it doesn’t look like rising house prices are going to stop anytime soon.
Read MoreKohler’s Charts – It Was A Pothole!
It was a week for charts, that’s for sure – the Mexican peso, gold, US Steel, gun manufacturers (see our Charts for Charts’ Sake site).
Read MoreKohler’s Charts – The US Election
There’s only one thing that matters this week: the US Presidential election. And we are in the topsy turvy world where the markets, and business people, are worried that the Republicans might win … because their candidate is one Donald Trump, who could do anything, and probably will.
Read MoreKohler’s Charts – Key RBA Forecasts
The RBA put out its six-monthly Statement on Monetary Policy today. Basically it’s saying that economic growth might go up (to 3.5%), or it might go down (to 2.5%), and inflation might stay the same, at 1.5%, or it might go up to 2.5%. In other words, our economic leaders at the central bank haven’t really got a clue; things could go either way from here. Nothing wrong with that, and in fact it’s always the case. When it comes to economic forecasts, the only people telling the truth are those who say they don’t know.
Read MoreKohler’s Charts – Cup Day RBA
This week is RBA meeting week, and the presentation of staff will be a classic economists’ “on the one and on the other hand”.
Read MoreKohler’s Charts – Ardent Leisure
The big business story of the week has also been the biggest non-business story – the tragedy at Dreamworld, which is owned by listed company Ardent Leisure. Its share price crashed, and the company’s board and management provided a useful lesson in how NOT to manage a crisis, among other things by going ahead with a vote at Thursday AGM on bonuses for the CEO, Deborah Thomas.
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