We release a monthly economic update, a monthly topical article, and a quarterly newsletter.

The monthly economic update takes a look at the latest issues affecting local and international markets.

The monthly topical article looks at different areas of financial advice and provides useful information, including any updates and changes within the financial services industry.

Our quarterly client newsletter keeps you up to date with the current hot topics in the world of financial planning and personal wealth management. Topics can include superannuation, investment, retirement, wealth protection through insurance, redundancy, and estate planning.

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OUTLOOK 2022

Following dramatic fiscal and monetary policy moves in 2020 and 2021, the stage is set for 2022 to be a year of transition as policies and economies move toward a more normal state. However, issues remain that will likely define the economic and market environment, including continued supply-chain disruptions and an upsurge in demand that threaten to keep inflation high across many economies. For 2022, our outlook is centered on the question of inflation and how markets and policymakers may react to it.

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China's Evergrande And Broader China Issues

Historically, western media has done a rather poor job at covering issues in China, and 2021 is no different. That has usually meant media/investor overreaction when not required and media/investor underreaction when required. Covering China is no easy feat in that communism can be hard for westerners to get their head around, and even once you do, it’s not like China is following any sort of traditional communist playbook. What counts when really understanding China's issues is history, experience, and a reasonable level of pragmatism.

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Treasurer supports Snap lockdowns despite costing $3bn a week

The federal Treasurer has confirmed the importance of snap lockdowns, highlighting that the alternative would cost the country five times more in economic losses, he said in a recent press event. Treasurer Josh Frydenberg has warned that until 70 percent of all Australians have been vaccinated from COVID-19 lockdowns will remain, despite costing the economy over $3 billion a week.

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Monthly Economic Update (August 2021)

Five issues played on the minds of investors last week, leading to a weaker equity market:

  • ASX earnings season: Last week’s results were more mixed than the previous But it was still a net positive. Management teams continue to indicate that lockdowns are not having as harsh an impact as many feared.
  • Domestic Covid situation: A deterioration has led to greater restrictions and more risk to economic growth and
  • Vaccines: New studies suggest vaccine effectiveness in preventing Covid fades relatively quickly, leading to calls for booster
  • US Fed: Signalled a more hawkish stance regarding tapering Quantitative
  • China: Beijing continues to reinforce the notion of “common prosperity,” seen by some as a risk of further market-unfriendly

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China Risks Rear Their Ugly Heads As Virus Fears Rise

  • Local and global stock markets fell this week as the Chinese government did its best to spook investors whilst the backdrop of rising virus fears and restrictions didn’t help investor sentiment.
  • In local stock news, Sydney Airport rejected an improved $22.8 billion bid from a group of infrastructure investors, with the board saying it undervalued the airport operator but that it was open to a higher offer. The board knows these investors have deep pockets, long-term liabilities they need to match, and little to no regard for valuation. The successful price likely needs to be close to $9, or at least north of $8.75.

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Interest rates – accentuating the negative

So, it’s just a normal day. You walk into the bank, deposit some money. And the teller asks you to pay them interest. Keeping your cool, you ask why.

And the teller apologetically explains: “Oh we’ve got negative interest rates.”

Right now, we’re living in a world where some countries have ‘negative interest rates.’ That means, that instead of rewarding customers for depositing money, a bank (or a central bank) will charge them interest. In financial terms, that’s the world turned upside down.

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Weekly Blog - MARKETS BUOYED BY US STIMULUS BILLS

  • Local and global equity markets rose strongly this week buoyed by strong company earnings results, the passage of the US infrastructure bill, and progress on the bigger budgetary bill.
  • Analysts now expect 2nd quarter profit growth of 93% for the 500 largest US companies. With their quarterly reporting season almost complete, 87% of companies have beat analyst expectations, which is the highest beat on record.

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Can you afford to retire early?

Many Australians caught in the nine-to-five grind of working for a living dream of the possibility of taking early retirement, spending their days travelling or playing golf or doing nothing much at all.

There's even a name for it these days.

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Weekly Blog - BUMPER AUSSIE INFLATION DROWNED OUT BY SYDNEY LOCKDOWN

  • Equity markets were mixed this week as central bank rhetoric and virus concerns dominated developed markets whilst the Chinese government did its best to unsettle Asian and emerging markets. 
  • US 2nd quarter company reporting season is firing on all cylinders with a very high proportion of companies beating consensus estimates, on both the top line (revenues) and on the bottom line (costs). Analysts now expect aggregate earnings growth of 78% for the quarter at the same time last year, which is an increase from the 54% growth expected at the beginning of the quarter.

 

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Weekly Blog: MARKETS STILL FRETTING OVER RISING VIRUS CASES

  • Equity markets were mixed this week with developed markets flat to slightly lower on virus concerns whilst emerging markets moved higher assisted by Chinese policy support. 
  • A big jump in quarterly earnings is expected to mark a peak for US profit growth in the recovery from last year’s earnings collapse.

 

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MARKETS STILL FRETTING OVER RISING VIRUS CASES

  • Equity markets were mixed this week with developed markets flat to slightly lower on virus concerns whilst emerging markets moved higher assisted by Chinese policy support. 
  • A big jump in quarterly earnings is expected to mark a peak for US profit growth in the recovery from last year’s earnings collapse.

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