We conducted a cross-asset scenario analysis on potential outcomes from the upcoming midterm elections in the United States. Using both a macro and a bottom-up approach, our base case was for a Democratic House of Representatives and a Republican Senate, but we also considered the possibility of a sweep in... Show More
2018 has been a fascinating year so far with many different cross-currents running through markets. We have seen central banks hiking, just as Governments look to expand fiscally. At the same time, the big economic powerhouses go head-to-head on trade. Where does this all lead us? Below we walk through... Show More
It is now passé to say the Australian equity market is becoming fully valued, led by the TIHCs — Technology, Infrastructure, Healthcare and China-facing consumer stocks — where multiples are at record levels. The bigger question is whether this is, in fact, just a natural state of affairs. Shouldn’t investors... Show More
We recently met with 170 companies as part of a research road trip that crossed the US and Europe, to test existing investment theses, and look for new opportunities and trends. One key takeaway was that we have found far more attractive opportunities in global small to midcap (SMID) companies.... Show More
There have been some well publicised concerns raised recently about the prospect of elevated risks across asset markets. So, Livewire went on the hunt for insights on how to remain invested in the current market, firstly asking a selection of fund managers: From your perspective is there a heightened level... Show More
Since the day before the US Presidential Elections on 8 November 2016 until 31 March 2017, MSCI World Industrials has returned 12.8% in AUD-terms, outperforming MSCI World by 0.9ppt. Analysing stocks and sub sectors within Industrials, we conclude that this has not been a ‘junk rally’ driven by the low-profitability... Show More
Macro outlook: The herd mentality in the market has driven investors into the same market darling sector and stock exposures. The defensive yield and macro growth sectors are now trading at historical high premiums and delivering relatively low yields. The risk in global growth and US rate cycle can unwind... Show More
Macro outlook: Central banks return to currency war with BOJ, ECB and PBOC looking to further easing bias while US Fed has turned substantially dovish on interest rate cycle. China, Japan and Europe will need more stimulus to work through further growth slowdown while the US economy will also run... Show More
We maintain our bullish long term view while the rise in US interest rate will deliver short term volatility. A recovering global macro, low interest rate environment, falling currency, lower commodity prices, potential stimulus from Europe/China/Japan and domestic rate cuts with weaker economy will help drive domestic equity markets higher.... Show More
Look beyond the global worries and the day-to-day volatility and you see that something's different in the Australian share market this year. That something might have consequences for how investors are going to perceive "risk" and "opportunities" moving forward. While broader indices are down for the year, small cap Industrials... Show More
Standout sectors remain the same as last month, with autos and telecom equipment manufacturers still performing strongly…Average yoy volumes dropped from 2.34% to 1.88% this month…Average pricing remains flat at -1.32% cf. -1.41% last month… Consumer discretionary is driving growth at 3.44% volume growth, albeit down from 5.24%...Industrials have stalled,... Show More
VRL look set to deliver a solid FY15 on 21/8/15. One of the main drivers for this resurgence has been the influx of Chinese tourists coming in their droves taking advantage of a Falling A$. Chinese outbound travel continues to grow rapidly, with the number of overseas trips taken surpassing... Show More
Human progress - a far longer super cycle than the resources sector has ever enjoyed. The Australian resource sector is haemorrhaging right now and investors might be asking what has changed all of a sudden. The short answer is nothing. This change has been coming for a long time but... Show More
Figures released by the NSW Audit Office show the state government's electricity companies earned a combined profit of $1.54 billion in the year to June, up from $1.03 billion a year earlier. Surging profits pushed the electricity companies' return on equity to 15.2 per cent, from 10.7 per cent, well... Show More