INVESTMENT UPDATES

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October 25, 2021

WEEKLY INVESTMENT UPDATE

Key points:

  • Global equities, property and infrastructure moved higher last week after another good week for earnings, including results from Tesla and Netflix. Wall Street remained bullish following strong earnings and positive vaccine developments. Even disappointing Chinese data and the prospect of an imminent tapering of bond purchases did not dampen sentiment.

  • The first Bitcoin futures ETF launched by ProShares began trading in the US. Bitcoin made a new record high but gave ground as the week progressed.

  • The RBA came under pressure from the market as it was forced to defend the 2024 yield target. Data on Wednesday is likely to show an increase in underlying inflationary trends.

  • This week will also see US GDP figures published and meetings at the European and Japanese central banks.

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October 18, 2021

WEEKLY INVESTMENT UPDATE

Key points:

  • Equities regained some strength last week after several weeks of consolidation. The US earnings season got off to a good start, while the bond markets took broadening sources of US dollar inflation in their stride.

  • Australian unemployment rose by less than expected from 4.5% to just 4.6% in September, according to the ABS. However, the figure was flattered by a lower labour force participation rate.

  • The latest IMF forecasts were little changed, but the Fund warned central bankers to remain vigilant to risks of higher inflation.

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October 11, 2021

WEEKLY INVESTMENT UPDATE

Key points:

  • Equity investors got some relief from risks related to Chinese property, the US debt ceiling, and soaring global energy prices last week. Iron ore and the Australian dollar also rose.

  • Bond yields continued to rise as inflation concerns persist and central banks move closer to tapering purchases.

  • The week closed with a US employment report that was probably strong enough to allow the Fed to start tapering, but only just. Wall Street traded flat on Friday going into the Columbus Day long weekend.

  • This week, the US will see more inflation figures and the first Q3 company results, while the September employment report is the key Australian data. The market will also be watching how NSW daily cases respond to reopening today.

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October 04, 2021

WEEKLY INVESTMENT UPDATE

Key points:

  • Bonds and equities ended the third quarter on a weak note during a volatile week dominated by debt ceiling concerns. A host of other worries also weighed on assets, including inflation, Chinese property sector defaults, and slowing earnings growth. However, there was also some positive Australian economic data and the arrival of a potential new antiviral drug to treat COVID-19.

  • The RBA will meet tomorrow, with the Reserve Bank expected to move further towards addressing the heat in Australian housing. The week ends with the monthly US labour report.

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September 27, 2021

WEEKLY INVESTMENT UPDATE

Key points:

  • The Federal Reserve provided a timeline for tapering last week, and a “less easy” outlook for global monetary conditions kept upward pressure on bond yields.

  • Evergrande has managed to avoid default, for now at least, providing some relief to stock markets. However, this week, the attention will be on a far bigger potential default - the US government. Congress has until Friday to raise the debt ceiling to avoid a government shutdown, which may lead to a default if not resolved. A deal is expected, but markets may see volatility increase.

  • The OECD predicted faster inflation and slower growth in its latest forecasts, and trimmed its global growth forecast for 2021 to 5.7% from 5.8%.

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September 20, 2021

WEEKLY INVESTMENT UPDATE

Key points:

  • Iron ore continued its rapid decline last week (18%), while energy commodities rose. Also weighing on the Australian dollar was the disappointing details of the August employment report and the RBA’s less positive economic outlook.

  • There will be several central bank meetings this week, with the focus on the Federal Reserve’s tapering plans. No immediate policy changes are expected, but bond yields are once again on the rise.

  • The market will learn this week if the prominent Hong Kong developer, Evergrande, is solvent.

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