yes , i used to make some managements cringe when i would proudly proclaim i was the ' token Australian ' ( and it wasn't that far from the truth , even back in the 1980's )Can't put the best people on the job divs, we have diversity quota's to fill.
i am not convinced that we are avoiding a Recession currently ( so much other current data is fudged , why not that as well ??)Too much fear around inflation when no one know's what will happen with covid in the mix. Relax & prepare
I found this a good read - Will We Go From Pandemic to Recession?
Then of course on Wednesday, having digested this news with their spicy beef snags they have for Australia Day, the RBA will release their deliberations on the Interest Rates.This week's latest inflation figures are likely to fuel speculation of an interest rate rise by the Reserve Bank of Australia this year, coming just days after an unexpected rapid drop in the unemployment rate.
The Australian Bureau of Statistics will release the consumer price index for the December quarter on Tuesday.
Economists forecasts point to a one per cent increase in the quarterly CPI, largely reflecting higher petrol prices and the increased cost of new housing.
The inflation figures may not come in at `%, could be higher or lower.This would take the annual rate to 3.1 per cent, up from three per cent as of the September quarter, and just above the RBA's two to three per cent target.
The more interest-rate sensitive underlying measure of inflation - which smooths out sharp price swings - is forecast to rise 0.7 per cent in the December quarter.
would take the annual rate to 2.4 per cent and up from 2.1 per cent as of the previous quarter, which was the first time it had been within the target since 2015.
Such a result would be stronger than the 2.25 per cent the RBA had been expecting at this stage, with a level of 2.5 per cent not predicted until mid-2023.
Similarly, last week's December labour figures showing a stunning drop in the jobless rate to 4.2 per cent was a faster decline than the central bank had forecast, having not expected 4.25 per cent until the end of this year.
A quote from Warren Buffett, the Chairman of Berkshire Hathaway in 1994, he wrote:
“We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Thirty years ago, no one could have foreseen the huge expansion of the Vietnam War, wage and price controls, two oil shocks, the resignation of a president, the dissolution of the Soviet Union, a one-day drop in the Dow of 508 points, or treasury bill yields fluctuating between 2.8% and 17.4%.” (emphasis added).
Panic and fear earns you nothing, research and diligence creates opportunity.
I like panic and fear, offers better discountskeep an eye on investing forums for a general guide on which way the public is going.
Yes, once again the experts got it wrong.The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.
Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.
All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.
Writing as been on the wall re inflation for some time now.
Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.
Interesting times ahead.
The Q4 CPI print came in higher across the board, and together with the strong employment figures last week, it’s looking increasingly likely that the RBA will end QE at their February meeting.
Speculation of a rate hike by the Aussie central bank could also cause the equity market to diverge from AUD/USD, with the currency pair trading higher on the data release, while the ASX200 is seemingly eyeing a break below 7000.
All trading carries risk, but should be interesting to see how the two markets play out over the rest of the week with the Fed’s interest rate decision on Thursday morning as well.
An issue there is I expect many won't have done the maths and simply don't comprehend what an x% interest rate increase means to them in actual $.Those leveraged to the hilt after purchasing property for insane prices will be feeling a little ill with the genie well and truly out of the bottle.
many will not work out ( quickly ) there will be more than one increase ( and NO , i have no idea how many more after 2 increases , the system might implode after two , or might stagger on for four or six or ten )An issue there is I expect many won't have done the maths and simply don't comprehend what an x% interest rate increase means to them in actual $.
Makes perfect sense and a potential scenarios.never underestimate the to put it lightly low mental sharpness of the huge majority, and this is not even linked to education level:In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.
Note that doesn't mean anything fundamental has changed at all, it's just about the math.
US CPI (annual rate)
January 2021 = 1.4% with previous months similarly low
February 2021 = 1.7% the first uptick albeit not much
March 2021 = 2.6%
April 2021 = 4.2%
May 2021= 5.0%
June 2021 = 5.4%
July 2021 = 5.4%
At the moment we're seeing 7% (December 2021) based on what was an essentially flat baseline of minimal CPI inflation 12 months prior. Once we get to February and especially March onwards though, the annual figure will be from a higher baseline and my expectation is we'll see less than 7% year on year growth from that already higher base.
Or in other words, the statistics should show a decline at that point and therein lies fuel for the Fed / market to say "look it's working, we only hiked rates once and it's already getting it sorted" and with that comes an assumption that there won't be many rate hikes at all and there comes a major rally in stocks.
Then in due course the reality that the problem hasn't really been fixed ripples through, my expectation being that energy prices will be the key trigger there, and then the real panic starts.
Just my two cents. I could well be completely wrong.
Yep, yellen's on record forecasting this entire year to be a mess but next year to be back to something more normal, take that for whatever you think it's worth.In the short term, next few months, we may see some improvement in data from the US. If that's so, well there's fuel for a change in sentiment and a decent rally in stocks.
Note that doesn't mean anything fundamental has changed at all, it's just about the math.
US CPI (annual rate)
January 2021 = 1.4% with previous months similarly low
February 2021 = 1.7% the first uptick albeit not much
March 2021 = 2.6%
April 2021 = 4.2%
May 2021= 5.0%
June 2021 = 5.4%
July 2021 = 5.4%
At the moment we're seeing 7% (December 2021) based on what was an essentially flat baseline of minimal CPI inflation 12 months prior. Once we get to February and especially March onwards though, the annual figure will be from a higher baseline and my expectation is we'll see less than 7% year on year growth from that already higher base.
Or in other words, the statistics should show a decline at that point and therein lies fuel for the Fed / market to say "look it's working, we only hiked rates once and it's already getting it sorted" and with that comes an assumption that there won't be many rate hikes at all and there comes a major rally in stocks.
Then in due course the reality that the problem hasn't really been fixed ripples through, my expectation being that energy prices will be the key trigger there, and then the real panic starts.
Just my two cents. I could well be completely wrong.
Three 25 basis point hikes have been forecast by the fed itself I believe. The current debate is whether there will be any more than that and/or whether the hikes will be higher.many will not work out ( quickly ) there will be more than one increase ( and NO , i have no idea how many more after 2 increases , the system might implode after two , or might stagger on for four or six or ten )
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