Olivers Insights

Dr Shane Oliver, Head of Investment Strategy and Chief Economist takes a look at the outlook for official interest rates in Australia following the RBA’s latest monthly board meeting.

The key points are as follows:

• The RBA left the cash rate at 0.1% at its April meeting.

• While the economy is recovering faster than expected the conditions for a rate hike – actual inflation sustainably in the 2-3% target zone and wages growth well above 3% – are unlikely to be met for several years.

• The RBA will likely start to slow its quantitative easing measures through this year though.

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Download pdf copy – Oliver’s Insights: RBA on hold and likely to remain easy for a long while yet as full employment gets more of a look in.

If you would like to discuss any of the issues raised by Dr Oliver, please call on |PHONE| or email |STAFFEMAIL|.

Dr Shane Oliver, Head of Investment Strategy and Chief Economist looks at the main questions investors commonly have regarding the investment outlook in a simple Q&A format..

The key points are as follows:

• Global recovery is on track. Vaccines are working.

• JobKeeper’s end won’t derail Australia’s recovery.

• Inflation could become an issue in the medium term.

• Shares are at risk of a correction but are supported by economic and earnings recovery.

• Australian house prices are booming again but expect measures to slow it down in the months ahead.

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Download pdf copy – Oliver’s Insights: Market outlook Q&A – global recovery, vaccines, inflation, the risk of a share crash, Aust house prices and other issues.

If you would like to discuss any of the issues raised by Dr Oliver, please call on |PHONE| or email |STAFFEMAIL|.

Dr Shane Oliver, Head of Investment Strategy and Chief Economist takes a look at where we are in the investment cycle.

The key points are as follows:

• The history of cyclical bull markets in shares suggests that the rebound since last March still has a way to go.

• But it’s normal for the second 12 months of a cyclical bull market to see slower returns from shares.

• While shares are vulnerable to a further correction triggered by the spike in bond yields, we are not seeing the sort of unambiguous overvaluation, economic overheating, monetary tightening and investor euphoria normally seen at cyclical tops.

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Download pdf copy – Oliver’s Insights: Shares have had a very strong rebound since March last year so where are we in the investment cycle?.

If you would like to discuss any of the issues raised by Dr Oliver, please call on |PHONE| or email |STAFFEMAIL|.

Dr Shane Oliver, Head of Investment Strategy and Chief Economist takes a look at Bitcoin which has had nearly a 15 fold increase in price from its low last year.

The key points are as follows:

• Digital currencies and blockchain technology may have a lot to offer – but that does not mean Bitcoin will be it.

• Due to extreme volatility, high transaction costs and slow processing, Bitcoin does not cut it as digital cash.

• But it’s not an asset generating cashflows either, which makes it impossible to value.

• The key for investors is not to invest in something if you don’t understand it and to recognise that just because Bitcoin has surged in price does not prove its worth.

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Download pdf copy – Oliver’s Insights: Bitcoin – it’s not a currency, it’s not a capital asset… so what is it?.

If you would like to discuss any of the issues raised by Dr Oliver, please call on |PHONE|

Dr Shane Oliver, Head of Investment Strategy and Chief Economist provides some context and the implications for investors if the rally in bond yields put pressure on share markets.

The key points are as follows:

• Higher bond yields are normal in economic recovery and should not be a major problem for shares if they are matched by rising earnings. But too rapid a rise in bond yields risks driving a deeper correction in shares.

• Central banks want higher inflation but will look through any short-term spike.

• The 40-year downtrend in inflation and bond yields is likely over.

• But the fundamental backdrop of improving growth, rising profits and still low rates supports the case for solid 6-12 month returns from shares.

Read the full article here >>

Download pdf copy – Oliver’s Insights: The bond crash of 2021? Seven things for investors to consider.

If you would like to discuss any of the issues raised by Dr Oliver, please call on |PHONE|.

Dr Shane Oliver, Head of Investment Strategy and Chief Economist takes a look at the upswing now underway in the Australian residential property market.

The key points are as follows:

• Expect average Australian home prices to rise 5-10% this year and next as ultra-low interest rates and economic recovery feed through.

• However, the outlook is divergent – with houses expected to outperform units and smaller cities and regional property expected to play catch up.

• The drivers of the long-term property bull market that’s been underway since the mid 1990s may start to wane over the next 3-5 years as the long term decline in interest rates bottoms out and as the chronic undersupply of property gives way to oversupply.

Read the full article here >>

Download pdf copy – Oliver’s Insights: Australian house prices on the upswing again – seven things to bear in mind about the Australian property market.

If you would like to discuss any of the issues raised by Dr Oliver, please call on |PHONE|.