Signal or Noise

What will the RBA do next? (And what does it mean for your money?)

Forecasts are forecasts but the numbers don't lie. And at the end of the day, the numbers show an extremely tough conundrum for the Reserve Bank of Australia. Services inflation has not come down as fast as the RBA would like and goods inflation is starting to tick up. And while the overall inflation downtrend is generally intact, markets are extremely jittery to any upside surprise. 
The jobs market remains incredibly tight, housing costs continue to skyrocket, and consumer-led indicators like retail sales and confidence continue to remain sluggish.
So how will the Reserve Bank of Australia manage this period given the margin for error is so low - and even if it plays all its cards right, can it stick the soft landing if the US goes into a stagflationary environment?
Livewire's Signal or Noise is holding an economists' roundtable for the first time. This episode will be dedicated to the intersection of financial markets and economic policy. Joining Livewire's Hans Lee and regular panellist, AMP Deputy Chief Economist, Diana Mousina are two of the best in the business:
Luci Ellis, Westpac Chief Economist and ex-RBA Chief Economist
Johnathan McMenamin, Barrenjoey senior economist

7 commodities (and 8 stocks) to watch in this complex market

Cast your mind back to when markets were expecting seven rate cuts from the Federal Reserve, thanks to hopes of an immaculate disinflation in the United States and the persistence of a tight jobs market both stateside and in Australia. The 10-year yield in the US was under 4% and the crude oil price was hovering at around US$70/barrel - a warm price but not one that would cause alarm among investors.
Remember that time? Believe it or not, that was just five months ago. Fast forward to today and everything has changed. Crude oil now has US$100/barrel in its sights, the US 10-year yield is now at 4.5%, and gold prices are at all-time highs despite a breakdown in its traditional relationship with real yields.
It's such a remarkable performance that Russel Chesler of VanEck has described the move as a chance for investors to get in on a "once in a decade" opportunity for gold miners. But, as the next 20 minutes will reveal, this bullish view has both its proponents and sceptics. 
With this (and other huge moves in the commodities market in mind), Signal or Noise presents its annual episode dedicated to the intersection of commodities and the global economy. Joining yours truly and Diana Mousina, Deputy Chief Economist at AMP are:
Benjamin Goodwin, Analyst and Portfolio Manager at Merlon Capital Partners
Daniel Sullivan, Head of Global Natural Resources and Portfolio Manager at Janus Henderson Investors
Note: This episode was taped on Wednesday 10 April 2024. You can watch the episode, listen to the podcast, or read our edited summary here.
 

Where these investors are putting over $3 trillion to work in markets

In this brand new episode of Livewire's top-down investing show Signal or Noise, we'll aim to distil the noise and make sense of where the best investment opportunities live. Joining myself and our permanent panellist, AMP Deputy Chief Economist Diana Mousina are:
Lukasz de Pourbaix, Global Cross-Asset Specialist at Fidelity International
Tom Nash, Fixed Income Portfolio Manager at UBS Asset Management
Wire Link: https://www.livewiremarkets.com/wires/can-the-everything-rally-keep-going 

Could ASX earnings and dividends beat the odds and rise this year?

What do all the numbers of the last four weeks really say about the state of corporate Australia - and where are the best of the best investing their money given what has been handed down?
To find out, we bring you the Signal or Noise February Reporting Season episode. Joining AMP's Diana Mousina and your host, Livewire's Hans Lee, are two veteran stock pickers who also have a strong macro nous:
Steve Johnson, CIO at Forager 
Daniel Moore, Portfolio Manager at IML
Wire: https://www.livewiremarkets.com/wires/5-asx-stocks-these-experts-are-backing-for-post-february-and-beyond 

Why there is no credit crunch coming in 2024

While Signal or Noise was away on its summer break, the bulls were certainly out in force.
The Santa Rally which dominated the end of 2023 has been spurred on by an even bigger anticipation for rate cuts. The RBA was not tipped to cut rates at all just six months ago. Now, thanks to an inflation print that outshone almost all expectations, the Australian rates curve has two cuts priced in by the end of 2024. And as if on cue, the ASX 200 hit an all-time high.
And until the Federal Reserve's hawkish press conference last week, there were as many as six rate cuts priced into the US curve. Even before the Fed's meeting, the S&P 500 hit its first record close in two years. The anticipation for cuts led to the rally which loosened financial conditions around the world. Everything rallied - from bonds to equities and especially credit where one index of IG and High Yield asset values suggests that more than US$1 trillion in value has been added just since the October 2023 low.
So is this the Goldilocks setup for a vintage year in investing? To find out, Signal or Noise is back for the first show of 2024.

Why Australia is already in a recession (but the RBA can’t afford to cut interest rates)

 
Signal or Noise is a show that is designed to make sense of data and headlines - and 2023 had both of those in spades. 
For starters, 2023 revealed just how much 425 basis points in rate hikes from the Reserve Bank of Australia is affecting the economy. Economic growth has slowed markedly and inflation is still more than double the RBA's target. But the labour market remains remarkably resilient, fuelled by migration and a choice of more hiring over increasing existing productivity.
This year was full of market-moving headlines too. The reopening of China stumbled. Credit Suisse and Silicon Valley Bank collapsed. Labour strikes dominated the Northern Hemisphere summer. Wars in Eastern Europe and the Middle East fuelled wild swings in commodity prices. And the influence of AI and Warren Buffett on American and Japanese stocks respectively have all dominated the front pages at one point or another this year. 
So what did all this headline-reaction-new headline-new reaction pattern produce in terms of returns? 
The ASX 200 will finish the year up around 8%, the equal-weight S&P 500 will likely finish the year up around 10%, and both the Australian Dollar and US 10-year bond yield will likely finish the year where they started.
Exhausted and confused? You're not alone. 
To walk us through the year it has been and to preview what may happen in 2024, Signal or Noise presents its season finale. Moderator Hans Lee jumps in the chair one last time alongside series regular Diana Mousina of AMP. They are also joined by these panellists:
Raaz Bhuyan, Principal and Portfolio Manager at WaveStone Capital
Jonathan Kearns, Chief Economist at Challenger Group
Note: This episode was taped on Wednesday 13 December 2023. You can watch the show, listen to our podcast, or read the edited summary here.

Signal or Noise: Are we at the start of the next house price boom?

What does the housing cycle look like ahead of 2024? And will the consensus forecast of 5% national house price growth be smashed again? 
To discuss it all, Signal or Noise has assembled the country's top property experts for our annual show focused on the Australian housing story. Joining moderator Hans Lee and AMP's Diana Mousina are:
Eliza Owen, CoreLogic's Head of Australian Research, and
Chris Bedingfield, Principal and Portfolio Manager at Quay Global Investors.
Note: This episode was filmed on Wednesday 15 November 2023. You can watch the show, listen to the podcast, or read an edited summary below.

How to invest in a market full of confusing signals

For a show called Signal or Noise, market pricing of late has been full of confusing and contradicting signals. 
On one hand, equity markets in Australia and the US pulled back from recent highs. The ASX 200 is tracking at six-month lows while the NASDAQ is off by more than 6% in the last 30 days alone. The US 10-year yield, widely considered the global benchmark for asset valuations, is up 50 basis points in just one month. BCA Research has described the savage sell-off in bonds as indicative of the "start of a financial accident". 
Crude oil prices briefly flirted with levels not seen since July 2022. And the US Dollar was once again the safe haven of choice as investors took profits on a gold price that was trading near all-time highs. 
And the most remarkable part of all this? There has been no RBA rate hike for four months (and counting, as of writing).
So is this a healthy correction or what the start of a much larger unwind looks like? And if there has been no rate hike for a few months, is this what unprecedented monetary policy really looks like?
To separate what signals are left amongst all the noise, Livewire's Hans Lee and AMP's Diana Mousina are joined by two of Australia's brightest investing minds:
Alexandre Ventelon of Morgan Stanley Wealth Management, and
Anthony Golowenko of MLC Asset Management
Note: This episode was taped on Wednesday 4 October 2023. You can watch the show, listen to the podcast, or read our edited summary here: https://www.livewiremarkets.com/wires/how-to-invest-in-a-market-full-of-confusing-signals/