Economics

AMP recently promoted senior economist Diana Mousina to a new role, deputy chief economist, in recognition of her achievements and succession path. Like other economists, Mousina sees a recession on the cards for Australia, although the timeline may be longer than many hope.

With rising financial stability risk complicating the already uncertain outlook for global economies, the IMF warns a hard landing is becoming more likely, while Australia is set for particularly weak growth in the short-term. Inflation remains the prevailing concern.

With China’s recent policy shift prioritising domestic businesses over foreign alternatives helping to drive growth, investors should look for companies and sectors set to benefit from policy tailwinds, according to Ninety One’s Charlie Dutton and Mendy Zhang.

The current economic cycle is too changeable to set any portfolio to autopilot, according to Mason Stevens’ Jacqueline Fernley. Counterpoints to conviction are needed, and the devil’s advocate should be your friend.

Most borrowers have continued to service their debts despite rising interest rates, while the strong labour market has underpinned income growth. However, as debt levels rise, the share of Australian mortgage holders with disposable income is dropping, according to a new report.

As part of the RBA’s program exploring a potential Australian central bank digital currency, ANZ has successfully completed a tokenised carbon credit trade using a stablecoin backed by a pilot CBDC, with more use cases set to be tested soon.

Governor Philip Lowe took a more dovish tone in announcing the central bank would leave the cash rate target at 3.6 percent, as markets welcomed the chance to let the 350 basis points of tightening already engineered to take full effect on the economy.

While real estate investment trusts have been touted as risk investments, analysis say Australian REITs like Charter Hall and Dexus have solid fundamentals, with income underpinned by long leases to strong tenants.

“Gradually, and then suddenly”, the old Hemingway quote goes. The same could be said for corporate earnings, which Ruffer’s Jasmine Yeo believes are in danger of taking a sharp southerly turn.

Investors holding out for a monetary policy hero will have to keep holding out. And as regulators put out spot fires in the global banking system, they’ll need to reckon with the new behemoths they’ve made.

Small cap investing has considerable upside, which the long-term returns data show. But many small caps are less than quality grade, and the managers picking them can be rife with bias.

Shifting market dynamics mean some of the investment themes that worked in recent years are set to give way to new opportunities. Man Group’s Andrew Swan and Prime Value’s Richard Ivers recently discussed the promising outlook for Asia and small-cap stocks, where it’s all about fundamentals.