21-09-2021
George Lucas, Raiz Group CEO
In Japan, the resignation of Japan’s Prime Minister Yoshihide Suga at the start of September appears to have raised investors’ hopes that the country might see a renewed focus on the economic policies of his predecessor Shinzo Abe, such as further fiscal stimulus and structural reform.
Just like you can own a fraction of an ETF in your Raiz portfolio or Raiz Invest Super portfolio, you can own pieces of properties via Superestate, the super fund recently acquired by Raiz that looks to democratise investing in property.
The “S” word: Stagflation. It’s a term being increasingly used in financial media. Don’t worry, it’s not a rude “S” word 😅 It suggests that inflation globally could persist for some time, certainly longer than the US Federal Reserve would care to admit… But it is also describing a period of low global economic growth.
06-09-2021
George Lucas, Raiz Group CEO
While it wasn’t the most eventful week overall, there were some interesting developments in the US when the US Labor Department reported August payroll data.
The data showed that nonfarm payrolls lifted by 235,000 jobs last month, the smallest rise since January, as hiring in the hospitality and leisure sector stagnated amid another surge in COVID-19 infections, which dampened demand at restaurants and hotels across the country.
For the US Federal Reserve, the weak payrolls data complicates the outlook and raises questions about whether the central bank will start tapering asset purchase before the end of the year.
US Fed Chair Jerome Powell implied at a speech at the Jackson Hole conference last week that the central bank wants to commence tapering before the end of 2021, but the plan is thought to be conditional on continued gains in the jobs market.
The subdued August payroll data therefore complicates the picture for the US Fed and may mean that any announcement of tapering will now be pushed back, potentially into early 2022.
What was unexpectedly strong in the jobs report was wage growth — a sign of growing price pressure in the US. As a result, we saw a muted reaction from equity markets as the data did nothing to ease the fears around rising inflation in the US. As we said this job report complicates things for the US Fed.
In China, the Caixin/Markit services Purchasing Managers’ Index (PMI) fell from 54.9 to 46.7 last month, which apart from last year’s lockdown was the weakest reading on record. The 50-point line separates growth from contraction on a month-by-month basis in China’s services sector.
The slump in the August reading adds to signs from the official non-manufacturing PMI that COVID-19 disruptions have weighed on recent services activity in the world’s second largest economy.
Looking ahead, the weakness in services should reverse in September now that most recent COVID restrictions in China have been eased. Still, coronavirus disruption aside, China’s economy looks to be coming back to earth following a period of above-trend output.
In Australia, we had official figures released showing gross domestic product increased 0.7 per cent in the June quarter, down from 1.9 per cent in the three months to March.
The 0.7 per cent rise in Q2 was broadly in line with the Reserve Bank of Australia’s expectations and we suspect that as a result it will likely press ahead with tapering its asset purchases this month.
However, looking ahead, we expect a 1.5 per cent quarter-on-quarter decline in output in Q3 as the recent spate of COVID-19 lockdowns, especially in NSW and Victoria, weighs heavily on activity.
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23-08-2021
George Lucas, Raiz Group CEO
China is in the spotlight this week. The Asian superpower’s economy is likely to continue to slow in the coming months which will be a headwind for commodity-linked currencies like Australia, Indonesia, and Malaysia over the next couple of years. Remember, I am not saying China will cease growing, but that the growth rate will not be as high as in the past, and that this will have knock-on effects.
Your super balance often forms a significant part of growing your long-term savings for retirement. It may surprise you to know there are currently government schemes available to support you in getting the most out of your super, including the co-contribution program.
After first publishing this blog in June 2021, the ASX200 Index has notched up two straight months of gains, taking its run to ten consecutive months of gains. European markets have recorded six consecutive months of gains, and US markets also continue to hover near records.
Thursday 5th August 2021 signalled a significant day in American policy, with Biden signing an executive order calling for half of new vehicles sold in the US to be electric by 2030 as part of plans to slash transport emissions. Not only do we believe this is a step in the right direction for the planet, but the additional investment into the green sector and job creation could also be the triple win we all need right now. Read Post
09-08-2021
George Lucas, Raiz Group CEO
In the US, 80 per cent of S&P 500 companies have now reported second-quarter results, with a record 86 per cent exceeding expectations on profits, according to data from S&P.
There is always a lot of interest from our community in the performance of our portfolios. We are pleased to announce the one and three year performance of our portfolios, where five of our portfolios outperformed the relevant three year Chant West industry benchmark (for Moderately Conservative there is no corresponding benchmark and Sapphire only has 1 year of performance).
