Some sectors may be set for a margin squeeze

Some sectors may be set for a margin squeeze

Rising cost pressures and a drop in pricing power are a recipe for a margin squeeze. The latest reading from Fidelity International’s monthly analyst survey shows which companies are struggling with inflationary pressure but also weaker pricing power.  

06 November 2020
Correlations boil and bubble and may spell toil and trouble

Correlations boil and bubble and may spell toil and trouble

In this follow-up special Halloween edition of Chart Room, we look at how correlations are casting a spell over markets.

30 October 2020
Chart of the week - debt-to-GDP edition

Chart of the week - debt-to-GDP edition

Unconventional monetary policy, like yield curve control and quantitative easing, is assisting governments by keeping bond yields low. But what happens if central banks around the world fail to act, while inflation moves higher? 

22 October 2020
European cyclicals could be vulnerable

European cyclicals could be vulnerable

Global manufacturing activity dropped sharply at the start of the Covid-19 outbreak, but then rebounded just as quickly, sparking sharp positive moves in cyclical stocks. Now, valuations for some of these are looking stretched, and any moderation in the growth of new manufacturing orders could make cyclicals vulnerable to a de-rating. Cyclical companies will need to deliver on earnings expectations to support valuations.

09 October 2020
Is disinflation lurking around the corner?

Is disinflation lurking around the corner?

In a bullish signal, the bond market’s short-term expectations for US inflation are back near pre-crisis levels, while CPI is tracing a similar V-shaped recovery. But are investors being overly optimistic?

23 September 2020
Lower than you think

Lower than you think

Technology stocks have propelled the market’s rally to record highs this year, receiving an inadvertent boost as Covid-19 lockdowns forced the world onto digital platforms for work, education, and entertainment. That resulted in a narrowing of market leadership that has raised concerns around the sustainability of sometimes lofty valuations. But a closer look at longer-term valuations reveals some surprising trends in tech. 

18 September 2020
Chart of the week: Equity market recovery

Chart of the week: Equity market recovery

The recovery in the Australian equity market from the lows in March has left some investors perplexed. How can equity markets be rising when the real economy has sustained so much damage?

05 August 2020
A heavy outlook for the US Dollar

A heavy outlook for the US Dollar

The US Dollar Index has sunk to a 22-month low and registered its fourth worst three-month return in a decade as of 24 July. The relentless spread of Covid-19 across the US and improving risk sentiment elsewhere is crimping demand for the safe-haven reserve currency. Interest rates suggest there could be more depreciation to come.

31 July 2020
Robots on the rise in a post-Covid world

Robots on the rise in a post-Covid world

Restrictions to curtail the spread of Covid-19 have reduced operations at factories and global supply chains have been impacted. We think factory automation will accelerate further in a post-Covid world, as machines don’t get sick and can work continuously 24/7/365, excluding maintenance.  

24 July 2020
Chart of the week: Youth unemployment

Chart of the week: Youth unemployment

This week Anthony looks at youth unemployment, as official numbers are now stating over 300,000 Australians aged between 15-24 are now unemployed, thanks to COVID and the associated lockdown measures. The analysis, however, doesn't take into account the underemployed, which blows out this figure even further. So what is the true impact?

03 July 2020
Opportunities in EM Asian equities?

Opportunities in EM Asian equities?

The global health crisis has driven a wedge between parts of the equity market. Perhaps one of the starkest examples can be found in Asia. The MSCI Emerging Markets (EM) Asia index has now recovered nearly 85% of its loss since its low in late March, but much of this is due to the performance of Chinese, Taiwanese and Korean stocks that dominate the index.

01 July 2020
Another false dawn for value stocks?

Another false dawn for value stocks?

Value stocks have outperformed growth stocks over the past month, raising the prospect of a changing of the guard in terms of market leadership between the two investing styles. Growth has been dominant up to now and a broader participation of stocks in the recovery would be welcome, but over the past decade, previous periods of value outperformance have been short-lived. Will this time be different?

11 June 2020