“The year 1916 was cursed; 1917 will surely be better”
Apparently this was a quote from Tsar Nicholas II’s diary. Whilst there is some debate as to the origin and authenticity of the quote I’m happy to use it here regardless. Please keep it, Brexit & Trump in mind while you read on as we present to you VFS Group Investment Committee’s “French Scenarios.” (Enjoy)
Unsurprising to most, a large part of my upbringing was spent watching British TV comedies. As much as this helped shape (warp) my sense of humour it also has helped me understand the British regard toward Europe as a whole.
Ah, March for the Australian investor. What a beautiful time to be in the markets. Just close enough to the New Year for the Christmas rally to be a fond memory and just far enough away from the “Sell In May & Go Away” crowd to start getting on their soapbox.
To tee off there’s been some serious rumblings regarding Harvey Norman this week. We all would have read about it and/or heard about the recent batch of bad news. Anyone who doesn’t know my thoughts on Harvey’s I ask you to please read my last seven months of work on the space. Harvey Norman is a dead man walking even without the alleged accounting scandal & ASIC investigation hanging over their head.
Firstly to the weekend papers where I noticed the Financial Times have run a full page article on the Internet Of Things. This is a great read and highlights how the CIA is allegedly using Smart TV’s to spy on users. It goes on with more detail on the dangers we are exposing ourselves to by allowing these devices to become such a trusted part of our lives.
Over the years you learn a thing or two about equity markets. To state the facts, the Australian market does not go up in a straight line and is inherently less bullish than its bigger brother in the USA. There are a number of considerations to be made when looking at why this divergence occurs between the two markets and most notably it is that we are dominated by 2 sectors: Banks and Miners.
Another month flies past and we barely have time to think about what’s ahead. February was obviously dominated by Trump and Reporting season. As much as company reporting takes focus away from global events no one could look away as the lead up to and delivery of Trump’s address to Congress. From the start of February to the end, the chances of the Fed raising rates has moved from “maybe” to “definitely” which makes our US banks trade all the more valuable. As at the start of March the chance of the Fed rate rise next week is 80%. Already at the time of writing it is much higher. See chart below, courtesy Bloomberg.
As many would know, reporting season puts a bee in my bonnet. Many companies reporting things they may/may not have forecasted & the market rewarding/beating them up appropriately. I don’t chase stocks, nor do I react to the financial press so it’s usually a time to sit by the side and look at the big picture, preferably an interesting one.
The following looks at your language and how everyday things you take for granted are being used to make money.
It would be remiss of us not to start this month’s Review with what was far and away the biggest event of the year, that being the election of Donald J. Trump. Four weeks ago he was given no chance of winning the Presidency with some market commentators predicting disaster to markets in the rare likelihood of his election. Today he is the President-elect with a wide range of business friendly policies ready to roll out when possible. The market reacted negatively upon seeing the first signs of Trump’s miraculous win.
October was a shaky month for the ASX200 which underperformed most major indices, finishing the month down around 3%. The market shot down to 5200 where there is clear support but whether it can hold this level leading into election week is another story.