Markets Archives - Page 404 of 724

Leveling Australia’s Superannuation Playing Field

The taxation of superannuation has been the cause of much consternation. Much of the difficulty is the result of the slow drift of superannuation from the moorings of its original purpose.

In introducing the superannuation guarantee in 1992, the Keating government was pursuing an ideal firmly centred on the ordinary person of ordinary means. The hope was to extend superannuation to the entire workforce as a means of ensuring working people were not wholly dependent on the state in funding their retirement.

China Sees Lower Growth, Higher Stock Prices

Despite indicators of a continually cooling macroeconomic environment, Chinese stocks continue higher, even as disinflation and weak factory activity signal continued weakness.

Saving Malaysia from Itself

Malaysia is currently in crisis; the ringgit seems to be on an inexorable downhill slide, ethnic tensions have deteriorated from an uncomfortable simmer to an open flame, and both the government and opposition coalitions are unravelling. Malaysian politics and society have hit rough patches before. The dominant United Malays National Organisation (UMNO) party fractures about once a decade, opposition parties fall in and out of love like teenagers, and cyclical economic downturns summon forth the usual host of scapegoats and bogeys.

Low Commodity Prices Threaten the Congo

Many African countries have in recent years, shown phenomenal economic growth. However, recent developments on global markets – including the drop in prices of commodities such as oil, copper, and cobalt – have raised questions about the sustainability of Africa’s economic growth.

The instability of global market has lowered investors’ confidence, and led to questions about the health of the global market. There is a feeling of uncertainty and fears of financial global crises, especially due to a slowdown in China’s economy.

ISM Data Shows Services Leaving Manufacturing in the Dust

The October employment data convinced many that a Fed hike in December is a strong probability. On top of the strongest average hourly earnings in several years, the US reported a record increase in September consumer credit. Earlier last week, the US reported the stronger than expected October auto sales. It was the second month in excess of 18 mln vehicles at an annualized rate. This happened two other times since 1990.

A Dark Cloud Still Hangs Over Emerging Markets

EM starts the week off on softer footing, as Friday’s jobs report supports the notion of December Fed lift-off. USD/ZAR is making new all-time highs, and we expect most of EM to revisit the lows from August and September as the lift-off approaches. Barring a disastrous November jobs report, we believe a rate hike will happen on December 16. As such, we remain negative on EM near-term.

India’s BJP not Feeling the Love in Bihar Election

As the Hindi saying goes: If you live in the water, do not make an enemy of the crocodile.

The ruling party in India, the BJP, was defeated in the Bihar state assembly elections. The party came out with 59 seats out of 243, down 35 seats from the previous elections and considerably worse than expected. Many were looking at the Bihar elections as a referendum of sorts on Modi’s first 17 months in power.

Finance Dominates U.S. GDP Growth

Finance and insurance is seeing the largest increases in its contribution to America’s GDP, largely due to more Federal Reserve banks and use of credit in America and in foreign markets.

Finance and insurance saw a 12.4% increase in its value as a contribution to GDP in the second quarter of 2015 after falling 3.8% in the first quarter. The Bureau of Economic Analysis attributed the growth to “an increase in Federal Reserve banks, credit intermediation, and related activities.”

The Turkish Election and Central Bank News Headline the EM Space

1) The AKP won a majority in the Turkish elections; 2) Colombia’s central bank unexpectedly hiked rates by 50 bps to 5.25% and added some new FX measures to its arsenal; 3) China will lift a freeze on IPOs by the end of the year; 4) Petrobras workers went on strike; 5) The National Bank of Hungary is turning to unconventional measures; 6) Czech central bank now sees an exit from the koruna cap as likely around the end of 2016; 7) Kazakhstan has a new central bank governor

Saber-rattling over the South China Sea Could Delay Regional Plans

Recent naval manoeuvres and land reclamation activities in the Spratly Islands have drawn attention to the risk of incidents at sea leading to growing tensions and even conflict in the South China Sea. On Tuesday 27 October 2015, the United States Navy sent its state-of-the-art guided-missile destroyer USS Lassen into waters within 12 nautical miles of Subi Reef, which China claims. Chinese naval vessels shadowed the USS Lassen until it left the waters around Subi Reef and Mischief Reef.