After a strong performance on Friday night and a positive Asian session, global sharemarkets were a bit mixed last night. The bulls went back to their corrals as concerns about global growth resurfaced following the International Monetary Fund’s modest downgrade to global growth for 2012 (to 3.5%, but some fairly sizable downgrades to the UK, with cuts also for China to 8%, India to 6.1% and Brazil to 2.5%). The IMF stated that its lower forecast is contingent on fast policy action to solve the European Debt Crisis, which has proven to be somewhat allusive thus far.
Accordingly, European markets opened in negative territory, but it wasn't long before the market was 'bid' and erased all of the losses - after which it spend the day oscillating between +0.1% and -0.5% in quiet trading and with 30 minutes left to trade most bourses were off -0.4%, but the market rallied into the close with Germany posting slight gains (+0.1%) with France (flat) and the UK (-0.1%) in the minor medal positions. With the exception of Spain (-2.0%), performances in the periphery were generally modest with Greece (-0.3%), Italy (-0.4%) and Portugal (-0.6%) recording slightly larger declines than their northern peers.
Meanwhile, investors wait for Fed Chairman Bernanke's two day testimony before the US Congress starting tomorrow, which could detail what the Fed needs to see before providing more stimuli. This is bit of a balancing act, as investors will need to see weaker US data to receive more stimulus, but in the meantime, US June retail sales were much weaker than expected (-0.5% vs. expectations for +0.2%), which represented the third consecutive monthly decline and adds to evidence that US growth has slowed – this partly justifies the recent price trends in large US retail stocks (shares in Supervalu (one of the largest US supermarket chains) were down -54% over last week (over missed earnings guidance), whereas electronics retailer Best Buy was -12% lower, Sears dived -12% and discount Chain Family Dollar lost -3%) and it might be the case that upcoming fiscal austerity will impact US disposable income and is beginning to changeUS consumer spending decisions. On a more positive note, the New York state factory orders beat forecasts.
Meanwhile, Citigroup posted well-received second-quarter earnings with Goldman Sachs, Intel and Johnson & Johnson due to report tonight. Nonetheless, the weak state of the US consumer weighed on Wall Street as the market opened in negative territory and never saw black ink all day. The S&P 500 (-0.2%) outperformed the Dow and NASDAQ (both -0.4%) and US bond yields (1.48%) declined more towards new 220-year lows (and German 2-year bonds continue to trade at record low rates of -0.1%).
Despite the soft economic environment and waning investor confidence, commodities were most up overnight - the CRB Index was up (+0.7%), but oil (+1.5% to USD 88.5 per barrel despite the Straits of Hormuz re-opening) and soft commodities (around +2%) posted larger gains. Conversely, gold (-0.0%), silver (-0.2%) and Dr Copper (-0.5%) were down. Today we get the RBA July meeting minutes (at 11.30am) and motor vehicle sales, whereas we get the July ZEW economic gauge for Germany (Jun: 33.2, exp: 30.0), June US core CPI (May: -0.3% exp: 0.0%), June US Industrial production (May: -0.1%, exp: 0.3%) and Chairman's Bernanke's testimony begins.
Matthew Sherwood
Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Tue, 04 Sep 2012
Asian markets were mixed on Monday with the MSCI Asia Index flat as gains in China, Hong Kong, Korea, and Australia were offset by declines in Japan and Singapore. Asian markets were under early pressure as investors noted how China's slowdown was impacting regional supply chains – and taking its toll on exporters in the process. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Thu, 30 Aug 2012
The highs and lows in Europe continue. Overnight, European markets opened once again in the red and in the first hour were down at their daily lows. But the release of an opinion piece by European Central Bank President Mario Draghi in a German newspaper strengthened expectations that a major announcement on measures to address the European debt crisis was imminent and sparked a rally after Mr Draghi wrote that “exceptional measures” were occasionally needed by the ECB to ensure monetary policy was effective. More »
By Adam Curtis | Senior Portfolio Specialist, Income and Multi Sector
Adam has over 12 years’ experience in the financial markets. Having graduated with an International Business degree in 1997, Adam joined Bankers Trust, working in the funds management and margin lending business. In 2000, Adam moved to London and joined the Bank of New York for the next two years, where he worked on the fixed income desk and serviced a range of institutional clients across mainland Europe.
Upon returning to Australia, Adam was hired by CPG Advisory, a specialised Asset Consultancy based in Sydney. He worked there for nearly five years, providing advice and assistance in managing the investment portfolios of some of the firm's largest wholesale clients. In August 2008, Adam was recruited as Senior Portfolio Specialist at Perpetual in the Income and Multi Sector business where he represents Perpetual's capabilities across multi sector, fixed income and alternatives investment strategies.
Wed, 29 Aug 2012
Over the past five years, many investors have been attracted to term deposits as a way of meeting their needs for low risk investment, lured somewhat by the government guarantee on deposits. However, what many investors don’t realise is that the government guarantee is only applicable on term deposits of up to $250,000 and beyond this level, no guarantee of capital exists. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Mon, 27 Aug 2012
In the wake of a weak day in the US on Thursday, and a tough Asian session on Friday where Hong Kong, Japan, China and South Korea all fell by over 1%, European markets over the weekend opened in negative territory. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Thu, 23 Aug 2012
The impressive rally in global sharemarkets and corporate bonds over the past six weeks is showing signs of fatigue. Over that time, investors have piled into technology, consumer discretionary and financials shares in Northern Hemisphere markets, as additional policy support by regional central banks was factored into prices. The apparent sector rotation comes despite signs that global growth prospects are waning, as illustrated by recent data that showed Japan recorded its largest ever trade deficit in July. Yesterday, Asia had a down session as investors concern about a lack of a policy response by Chinese authorities saw widespread losses. This provided a challenging lead for Europe. More »
By Vivek Prabhu | Senior Portfolio Manager - Strategy & Risk
Vivek has been Portfolio Manager/Credit Analyst since joining Perpetual Investments in August 2004 and is responsible for credit analysis, portfolio construction and trading.
Vivek has over 15 years industry experience and prior to joining Perpetual worked for eight years at Macquarie Bank as an Analyst, Compliance Manager, Assistant Portfolio Manager (Fixed Interest & Currency) and Credit Analyst. Prior to that he spent four years as an accountant/auditor at Coopers & Lybrand (PwC).
Wed, 22 Aug 2012
The Australian Government introduced the Financial Claims Scheme in October 2008, strengthening protection for depositor holders of authorised deposit taking institutions to reassure investors about the safety of their deposits. This followed the introduction of similar measures taken by other countries in response to concerns around the availability and cost of funding for banks, following the collapse of Lehman Brothers in September 2008 and its impact on the stability of the global financial system. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Mon, 20 Aug 2012
After a strong Asian session in which all major regional indices were higher (led by Australia (+0.9%), Japan and Hong Kong (both up 0.8%) and China (+0.1%)), the scene was set for a good end to the week in Europe. It was green lights all the way on screens on Friday night as markets extended gains and touched multi-month highs as hopes for more Eurozone support and further signs of improvement in global economic data boosted sentiment around the Northern Hemisphere. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Wed, 15 Aug 2012
Yesterday saw a solid Asian session where all major regional indices were up after the minutes from the Bank of Japan’s latest policy meeting showed some board members supported further liquidity measures. European markets opened solidly last night with momentum aided by some better-than-expected GDP results. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Mon, 13 Aug 2012
Asia ended last week with a disappointing session in which Chinese data underwhelmed and regional sharemarkets were all down. Data for July continues to suggest that the soft landing in the Chinese economy has not been reached yet. Indeed, a slowdown in industrial production (IP) growth (from 9.5% to 9.2%), a plunge in annual export growth (to 1% from a double-digit pace in 2011) in July and tepid bank lending (which missed analyst forecasts by a wide margin) all point to the Chinese recovery being weaker, and coming later, than many investors had hoped. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Fri, 10 Aug 2012
Despite a strong Asian session (in which stocks in Hong Kong and Japan rose +1.0% following data from China which suggests that the economic boost remains elusive, but inflation dropped again, providing the Bank of China with more scope to support growth), the performance on the London and European stock exchanges, last night, was a complete repeat of the night before. The German and UK markets were down early (the former troughing at -1.0%) before staging a late surge to close flattish for the second day in succession. More »
By Jonathon Crook | General Manager Fixed Income
Jon joined Perpetual in October 1999. He has over 15 years experience in the financial services industry and is currently responsible for the Fixed Income business at Perpetual. Previous to this role Jon held a number of positions in both Adviser Distribution and Institutional Sales and Service within Perpetual. Before this, he spent three years with Count Financial Group. Jon has a Bachelor of Economics from the University of New South Wales and a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia.
Wed, 01 Aug 2012
As a result of the global financial crisis and the ongoing volatility in financial markets, investors have awakened to the vital role fixed income can play in generating reliable income and protecting capital.
However, fixed income is a very broad asset class, which includes everything from quality bonds backed by major governments and corporates to high yield, high risk junk bonds. It is therefore vital for investors and advisers to understand what drives the underlying risks and returns of different types of fixed income assets and how they can contribute to an overall portfolio. More »
By Matthew Sherwood | Head of Investment Market Research
Matthew is Perpetual Investment’s Head of Investment Markets Research. In his role, Matthew conducts research on and acts as an external voice on the Australian and global economies, financial markets and portfolio strategies.
Matthew has extensive financial industry experience as an economist, investment strategist and central banker. Prior to joining Perpetual Investments in 2005, he worked as an Investment Research Manager at ING Investment Management and before that he was a Senior Economist with the Reserve Bank of Australia, where he gained significant experience in monetary policy formulation. Matthew has a Bachelor of Business from the University of Newcastle and a Masters Degree in Economics (Finance and Econometrics) from the University of Sydney.
Tue, 17 Jul 2012
After a strong performance on Friday night and a positive Asian session, global sharemarkets were a bit mixed last night. The bulls went back to their corrals as concerns about global growth resurfaced following the International Monetary Fund’s modest downgrade to global growth for 2012 (to 3.5%, but some fairly sizable downgrades to the UK, with cuts also for China to 8%, India to 6.1% and Brazil to 2.5%). The IMF stated that its lower forecast is contingent on fast policy action to solve the European Debt Crisis, which has proven to be somewhat allusive thus far. More »
By Paul Skamvougeras | Portfolio Manager
Paul is the Portfolio Manager for the SHARE-PLUS Long-Short strategy, the Pure Equity Alpha strategy and the Concentrated Equity strategy.
Paul rejoined Perpetual Investments in February 2010 as a Portfolio Manager, having previously spent seven years with Perpetual. He began his career with Perpetual in 1994 in a back office role, moving into a dealing role after three years, working his way up to the Head Dealer role.
Between stints at Perpetual, Paul spent seven years working at CPH/Ellerston Capital, where he had portfolio management responsibilities for an Australian long/short strategy for the first four years and a global long/short strategy for the last three years.
Paul has a Bachelor of Economics from Macquarie University and is a Member of the Institute of Chartered Accountants.
Fri, 18 May 2012
Oil Search is an oil and gas exploration and development company that operates all of Papua New Guinea’s (PNG’s) productive oil and gas fields. There are a number of reasons why I like the stock. More »
By Jack Collopy | Portfolio Manager
Jack is the Portfolio Manager of the Smaller Companies strategy and an Analyst covering small cap companies across a range of sectors.
Jack joined Perpetual in November 2001 as an Investment Administrator and Equity Dealer. After four years, he moved into an Analyst role focusing on small cap industrial companies. Jack took on portfolio management responsibilities in June 2010.
Prior to joining Perpetual, Jack gained two years industry experience working in London as an Equities Dealer and Investment Administrator at both Salomon Smith Barney and Goldman Sachs Asset Management.
Jack has a Bachelor of Economics from the University of Sydney.
Wed, 16 May 2012
G8 Education Limited is the only child care centre operator listed in Australia (ASX code: GEM) and there are a number of reasons why I like the stock. More »
