The FinSec View

Issue: Friday 18 December 2020 In the words of Bob Dylan "Doesn't expecting the unexpected make the unexpected expected?" But what we weren't expecting... A pandemic on a global scale; Masks and social distancing our new normal; Children home-schooled; Borders closed; All gatherings and celebrations cancelled; The fastest bear market in history Businesses told to operate virtually or not at all; Almost 200 of the largest public companies in the US reaching zombie status; and Central banks the heroes, [...]

Issue: Friday 04 December 2020   The recession is officially over Adding to a year of wildly fluctuating data, figures released on Wednesday show the Australian economy grew by 3.3% in the July-September quarter. It's the largest quarterly increase since 1976 and comes after a 7% contraction in the April to June quarter, the largest quarterly fall on record. The growth spurt was powered by a rise in household consumption growing by 7.9%, the largest rise in the 60-year [...]

Issue: Friday 20 November 2020 It is hard not to be proud of the pragmatic and stoic way South Australians have responded to the state's hard lock-down. Perhaps not quite as much pride in the circumstances surrounding today's announcements and why we are now in a position to lift restrictions three days early... Regardless, we must count ourselves lucky, a few days is a far cry from the months our Melbourne friends and families endured. Only three confirmed cases [...]

US ELECTION SPECIAL EDITION: Friday 06 November 2020 A close race, but it would seem Joe Biden has it. Yet, with millions of votes still to be tabulated and Trump now calling for counting to stop, exactly when a winner will be declared, is still unclear. What is clear, is that this time it really seems to matter. With non-compulsory voting in the US, the historical challenge has always been to convince people to make the effort. Not this [...]

Issue: Friday 18 September 2020 'The Show Must Go On' ... As residents of #10 Greenhill Road, the middle of September represents show week and our cue to escape as a team for our annual business planning. This year (the first time in 100 years of The Royal Adelaide) the Ferris wheel did not turn, the show bags were regulated to supermarket shelves, and the silence (as a business, it is a noise we often begrudge) was deafening in [...]

Issue: Friday 04 September 2020 Australia Enters Recession Australia is officially in recession for the first time since 1991 after posting a 7% fall in GDP for the June quarter. The 'official' definition of a recession is two consecutive quarters of negative growth, and the June contraction follows a 0.3% decline in the March quarter, bringing a remarkable run to an end. However, the data release revealed some bright spots. The national savings rate rose to 20% from 6% [...]

US Equities Defy Gravity The S&P500 and the Nasdaq both hit all time highs this week. A capitulation can occur at extremes in markets, where the rally becomes so strong that even the doubters get FOMO and want in on the action. Right now, we can see these pockets of euphoric sentiment emerging and caution that if such optimism continues, equity markets will become overbought. The danger here is that when risk-on assets reach this level, they can exhibit [...]

Issue: Friday 07 August 2020 What a Year This Week Has Been! Our thoughts are with our Victorian clients, friends and families as the realities of COVID-19 escalate and they learn to deal with stage four restrictions. Yesterday, The Australian published alleged Victorian pandemic modelling which suggested new COVID-19 cases would be in the thousands for a protracted period next week, a frightening thought that made headlines around the country! Subsequently The state's deputy chief health officer, Professor Allen [...]