Category Archives: Oliver Updates


The trade war is back – what went wrong, what it means for share markets and Australia

14

May 2019

The trade war is back – what went wrong, what it means for share markets and Australia

After taking a back seat over the last six months as negotiations appeared to make progress the US/China trade war is back on with the President Trump – “tariff man” – ramping up tariffs on Chinese imports again and threatening more and China moving to retaliate. This note takes a simple Q & A approach to the key issues.   What is a trade war?…

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Seasonal patterns in shares – should we “sell in May and go away” and what about renewed trade war fears?

06

May 2019

Seasonal patterns in shares – should we “sell in May and go away” and what about renewed trade war fears?

Since late last year share markets have rebounded with US shares up 25% to their recent high, global shares up 22% and Australian shares up 17% as last year’s worries about tightening monetary policy led by the Fed, global growth and trade wars have faded to varying degrees. Following such a strong rebound some have said that maybe it’s now time to “sell in May…

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Inflation undershoots in Australia – why it's a concern, is the RBA running out of ammo & what it means for investors?

29

Apr 2019

Inflation undershoots in Australia – why it's a concern, is the RBA running out of ammo & what it means for investors?

Surprisingly weak Australian inflation has led to expectations the Reserve Bank will soon cut rates. But what’s driving low inflation? Is it really that bad? Why not just lower the inflation target? Will rate cuts help?And what does it mean for investors? Inflation surprises on the downside again Australian inflation as measured by the CPI was flat in the March quarter and up just 1.3%…

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The 2019 Australian Federal election and investors

11

Apr 2019

The 2019 Australian Federal election and investors

The Federal Election Some might be forgiven for thinking the wheels have fallen off Australian politics over the past decade with the same number of PM changes as Italy, a fractured Senate and “minority government” at times making sensible visionary long-term policy making hard. With the May 18 Federal Election offering a starker than normal choice political uncertainty may see another leg up. Polls give…

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The 2019-20 Australian Budget – the long-awaited surplus and the promise of more tax cuts ahead of the election

03

Apr 2019

The 2019-20 Australian Budget – the long-awaited surplus and the promise of more tax cuts ahead of the election

The 2019-20 Budget had three aims: to cement the Government’s fiscal credentials by delivering the long-awaited return to budget surplus; to provide fiscal stimulus to an ailing economy; and to help get the Government re-elected. It looks on track for the first thanks to a revenue windfall, this has provided room for fiscal stimulus and of course time will tell whether it makes a difference…

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Global growth slowing, plunging bond yields & inverted yield curves – not terminal but shares are due a pull back

27

Mar 2019

Global growth slowing, plunging bond yields & inverted yield curves – not terminal but shares are due a pull back

The past week has seen a renewed intensification of concerns about global growth. Bond yields have plunged and associated growth worries have weighed on share markets. This note looks at the global growth outlook, why shares are vulnerable to a pullback and why it’s unlikely to be a resumption of last year’s downtrend. Background But first some perspective. At their lows back in December global…

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Millennial socialism” and the swing of the political pendulum back to the left – what it means for investors

14

Mar 2019

Millennial socialism” and the swing of the political pendulum back to the left – what it means for investors

When I was in my early 20s I thought socialism might be the way to go. Two things happened. One I studied economics which led me to the conclusion that socialism/heavy state intervention doesn’t lead to the best outcome in terms of living standards for most. Second, I had the benefit of a trip to the USSR before it and the eastern bloc disintegrated. It…

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Australia slides into a "per capita recession"

07

Mar 2019

Australia slides into a "per capita recession"

Much has been made of Australia’s nearly 28 years without a recession. Despite many seeing recession as inevitable in response to the 1997 Asian crisis, the 2000-2003 tech wreck, the GFC and the “end” of the mining boom Australia has seemingly sailed on through each of these regardless. This has been thanks to a combination of economic reforms in the 1980s and 90s, the floating…

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Why I still love dividends and you should love them too

28

Feb 2019

Why I still love dividends and you should love them too

Prior to the 1960s most share investors were long-term investors who bought stocks for their dividend income. Investors then started to focus more on capital growth as bond yields rose relative to dividend yields on the back of rising inflation. However, thanks to an increased focus on investment income as baby boomers retire, interest in dividends has returned. This is a good thing because dividends…

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Five charts and a table that are critical to watch regarding the global economy and markets this year

21

Feb 2019

Five charts and a table that are critical to watch regarding the global economy and markets this year

I first ran through a set of five charts to keep an eye on regarding the global economy last September. Since then share markets plunged into December and have since rebounded. The rebound has been great, but we have seen such rebounds before only to see weakness resume so on its own it does not prove we are out of the woods. It’s rare for…

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