• 20.4.17 v2
    Geopolitical concerns, delays to the Trump Administration's planned fiscal stimulus, and benign US economic and inflation data have made bond markets more relaxed and equity markets more volatile. The US 10-year Treasury bond yield has rallied from a recent peak of just over 2.6%...[Read More]
    Posted On : April 20, 2017
  • Blog 14.3.17
    Marcus Tuck, Head of Equities  One of most reliable early warning indicators of an impending equity bear market is the shape of the US yield curve. When short-term interest rates are higher than long bond yields, it is a sign that monetary policy is tight enough to choke off ...[Read More]
    Posted On : March 14, 2017
  • blog 22.2.17
    The second stage of disruption - by Alex Pollak, CEO & CIO of Loftus Peak. The ups and downs of reporting season can sometimes mask disruptive changes. Disentangling what is cyclical and what is structural is not always easy at the time it is happening. Telstra, for exampl...[Read More]
    Posted On : February 22, 2017
  • Blog 30.1.17
    Marcus Tuck, Head of Equities  Similar to European equity markets, another part of the world where fearful perceptions have held back equity valuations is emerging markets. After being fairly range-bound from 2012 to mid-2015, fears of a hard landing for China's economy impac...[Read More]
    Posted On : February 13, 2017
  • webjet
    When looking for relatively low-risk equity investments, companies with strong balance sheets are a good place to start the search. If they happen to be effectively debt-free with a net cash position, then even better. With no financial pressure on companies to service loans duri...[Read More]
    Posted On : February 08, 2017
  • Blog 30.1.17
    With the Dow Jones Industrial Average Index finally breaking through the 20,000 barrier last week to a record high, the state of US-Mexico relations sank to the lowest level in living memory, some say since the Mexican-American War of 1846-48 that followed the US annexation of Te...[Read More]
    Posted On : January 30, 2017
  • blog 25.1.17
    Marcus Tuck, Head of Equities President Trump recently claimed he will be "the greatest jobs producer that God ever created". Economists debate how much presidents actually influence job creation and President Trump is coming into office at a time when the US economy is alread...[Read More]
    Posted On : January 25, 2017
  • blog 24.1.17
    Tim Govan - Investment Strategist, Credit & Fixed Income As long-term interest rates rose through November and December of last year, bank stocks in the US, Europe and Australia saw strong gains on the prospect of higher net interest margins, with the ASX/S&P 200 Banks...[Read More]
    Posted On : January 24, 2017
  • blog-9-12-16
    The US economy is already in its eighth year of expansion, albeit one of sub-par GDP growth until recently. S&P 500 earnings are near all-time highs, as are equity indices and valuations. Goldman Sachs' global strategy team points out that the US has followed a fairly typical...[Read More]
    Posted On : December 09, 2016
  • bonds-28-11-16
    The post-election sell off of long term bonds has continued through to the end of last week, with the US 10 year Treasury closing out the week at 2.36%pa - circa 0.7%pa higher than immediately prior to the US election. In Australia, our 10 year government bond rate has followed i...[Read More]
    Posted On : November 28, 2016
  • As interest rates remain around the highest levels since November 2015, we are three weeks away from the US Federal Reserve's next meeting on monetary policy, and two months away from the inauguration of President-elect Trump. With speculation of expansionary fiscal policy by the...[Read More]
    Posted On : November 24, 2016
  • blog-18-11-16
    The Bank of America Merrill Lynch (BofAML) Global Fund Manager Survey for November has just been released. The survey was conducted from 9 to 14 November, i.e. after the US election results were known. Responses were provided by 177 fund managers from around the world with combin...[Read More]
    Posted On : November 18, 2016
  • The one thing markets and pollsters were not expecting, a Republican clean sweep of the Presidency, House and Senate, has happened. The disenfranchised industrial heartland of America deserted the Democrats and swung behind Donald Trump, even though the popular vote was close. ...[Read More]
    Posted On : November 10, 2016
  • blog-9-11-16
    As the world awaits the outcome of the US Presidential and Congressional elections, one important trend that has been largely overlooked during the period of election uncertainty is the return to profit growth of the US corporate sector. Over 85% of the companies in the S&...[Read More]
    Posted On : November 09, 2016
  • blog-7-11-16
    Sector rotation in the US equity market over the past month has been driven by a combination of rising bond yields, stronger US economic growth and political risks going into Tuesday's US Presidential and Congressional elections. The chart shows the performance over the past mon...[Read More]
    Posted On : November 07, 2016
  • One way of valuing growth companies, many of which trade on high PE ratios, is by calculating PEG ratios, which basically divide expected EPS growth into the PE ratio. The lower the PEG ratio (preferably below 1.00) the better the value of the stock. There are various ways of ca...[Read More]
    Posted On : November 03, 2016
  • apple-27-10-16
    The world's most valuable company, Apple Inc (AAPL.US), reported three straight quarters of lower year-on-year sales and its first annual sales decline since 2001, as was expected. Apple released its earnings result for the fourth quarter of its fiscal 2016 after the closing b...[Read More]
    Posted On : October 27, 2016
  • blog-25-10-16
    AT&T (T.US), America's largest telecoms group by market value, announced on the weekend that it would pay US$107.50 a share to acquire Time Warner (TWX.US), the owner of CNN and HBO, which produces shows such as Game of Thrones and Veep, and Warner Brothers, Hollywood's large...[Read More]
    Posted On : October 25, 2016
  • daily-20-10-16
    Italy's much-delayed constitutional referendum looks like it will finally go ahead on 4 December. It has the potential to destabilize the European Union if the "No" vote wins. As described in a report by State Street Global Advisors (SSgA), Italy's referendum effectively pits the...[Read More]
    Posted On : October 20, 2016
  • blog-19-10-16
    Last week Fitch Ratings released the 4Q 2016 edition of their survey of Australian fixed income investors, which comprises the views on the economy and fixed income markets across a sample of major fixed income investors in the Australian market, including asset management firms,...[Read More]
    Posted On : October 19, 2016
  • bonds-17-10-16
    In the month to date thus far, we have seen equities and government bonds both decline across markets in developed countries such as the US, UK, Australia and others, defying the conventional theory that the prices of these two asset classes are negatively correlated. Under 'norm...[Read More]
    Posted On : October 17, 2016
  • 10-october
    Marcus Tuck, Head of Equities The British pound plunged 6% in two minutes to below USD 1.200 in early Asian trade on Friday, before recovering much of the loss. The extent of the drop was no doubt exacerbated by algorithmic trading or maybe even by a "fat finger" moment. Howev...[Read More]
    Posted On : October 10, 2016
  • all-that-glitters
    Marcus Tuck, Head of Equities   One theme we have explored in the past is the search for stocks that have a good combination of dividend yield and earnings growth, the so called GARY stocks (Growth And Reasonable Yield). We think that continues to be a sensible strategy and...[Read More]
    Posted On : October 07, 2016
  • 28sep-blog
    Marcus Tuck, Head of Equities  The shares of Germany's largest bank, Deutsche Bank (DBK.GY), have traded at their lowest level since 1983 after the bank denied German media reports that it had sought support from the German government and had been turned down. Germany's Focus...[Read More]
    Posted On : September 28, 2016
  • 27-sept-2016
    Marcus Tuck, Head of Equities Research With the first of three US Presidential debates due to start 11 a.m. our time today, the market will be sensitive to anything that sounds too alarming from either candidate or that is indicative of a wildcard Trump victory. The market has...[Read More]
    Posted On : September 27, 2016
  • 22sep-bonds
    Marcus Tuck, Head of Equities Research The Bank of Japan's (BoJ's) much anticipated review of its monetary policies was released yesterday afternoon. Prior to the announcement the market was very divided over what the BoJ might announce. The BoJ decided to keep its deposit ra...[Read More]
    Posted On : September 22, 2016
  • 16sep-chartr
    Marcus Tuck, Head of Equities Research The gravitational pull of lower bond prices (higher yields) has been pulling down equities in general but especially the interest-rate-sensitive sectors such as property trusts, infrastructure, utilities and telcos. The phenomenon is happ...[Read More]
    Posted On : September 16, 2016
  • hotel-skyline
    Marcus Tuck, Head of Equities Research The global hotel industry has been languishing under the competitive threat of Airbnb, terrorist attacks keeping tourists away from some destinations and, in some cases, high debt levels needed to carry their own expensive property portfo...[Read More]
    Posted On : September 14, 2016
  • yields
    Marcus Tuck, Head of Equities Research Volatility returned to global markets late last week after the European Central Bank President Mario Draghi left interest rates unchanged and downplayed the need to commit additional stimulus. The news surprised markets that had been expe...[Read More]
    Posted On : September 12, 2016
  • highway
    Tim Govan, Investment Strategist  Credit/Interest Rate Snapshot Last week continued a trend of subdued volumes and volatility, with the US in the final week of summer holidays and many market commentators remaining cautious following an overall hawkish tone in the week pri...[Read More]
    Posted On : September 05, 2016
  • Hermes1
    Marcus Tuck, Head of Equities Research It is sometimes said that luxury never goes out of style. However, when it comes to investing in luxury goods companies they can and do go out of style from time to time. The last year or so has been a difficult time for the luxury goods ...[Read More]
    Posted On : August 30, 2016
  • Digital portals
    Marcus Tuck, Head of Equities Research Emerging market stocks have recently risen to a one-year high. The MSCI Emerging Markets index has risen over 16% in USD terms since the start of the year, with technology shares leading the way. The two largest stocks in the index, Tenc...[Read More]
    Posted On : August 24, 2016
  • FX chart
    Marcus Tuck, Head of Equities Research Accurately predicting exchange rates movements is one of the toughest assignments in forecasting. Currency markets are big, liquid, homogeneous and efficient. The Australian dollar is the fifth-most traded currency in the world. When sur...[Read More]
    Posted On : August 22, 2016
  • SNAp
    Marcus Tuck, Head of Equities Research In the fast moving technology world a few companies win big, achieving lasting market dominance, but many more fall by the wayside or get quickly overtaken. The duration of a company's competitive advantage can be fleetingly short. Today'...[Read More]
    Posted On : August 17, 2016
  • tower of pisa
    Marcus Tuck, Head of Equities Research The next major EU flashpoint is probably in Italy due to the combination of another politically charged referendum, diabolical public finances, a flat-lining economy and under-capitalised banks with a lot of non-performing loans. Just ...[Read More]
    Posted On : July 12, 2016
  • light house small
    Tim Govan, Investment Strategist - Credit and Fixed Income As you are no doubt aware, interest rates in Australia are at all-time lows. The AUD denominated interest rate swap curve, on which most AUD denominated interest-bearing investments and loans are priced, is below 2%pa ...[Read More]
    Posted On : July 12, 2016
  • light cliffs
    Between a rock and a hard place, Marcus Tuck, Head of Equities Research Now that Prime Minister Turnbull has declared victory in the Federal election the already difficult task of governing has been made twice as hard by Standard & Poor's recent credit rating ultimatum. F...[Read More]
    Posted On : July 12, 2016
  • photo-1467501556106-31d7a35cc25d
    Disrupters of the Traditional Business World  Marcus Tuck, Head of Equities Research Technology is disrupting traditional business models around the world, with US and Chinese companies leading the way. The pace of change is only going to accelerate, with new technologies...[Read More]
    Posted On : July 08, 2016
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