Finance News

August is the start of reporting season - what does it mean for you?

Posted on Wednesday, August 10, 2022
1st August each year is not only every horse’s birthday, it’s also the unofficial start of reporting season. This is when ASX-listed companies report their performance in the last financial year. Some companies give full year results, while others report on the 4th quarter of the financial year (April-June). Now, you may think this doesn’t impact you but it likely does, especially if you have superannuation in managed funds or index funds with exposure to Australian shares. Yesterday the NAB reported it had benefited from an increase in home and business loans, as well as higher interest rates. Its CEO also said, "approximately 70 per cent of customer home loan repayments are ahead of schedule."    This morning the CBA announced an 11% increase in profit, which was better than expected. Investors should be happy with the $2.10 dividend, which is 10 cents higher than previous year’s end.  A2 Milk failed to get FDA approval to export baby for ... Read the rest of entry »

Well, there's good news, and there's bad news

Posted on Thursday, August 4, 2022
As we all know by now, the RBA hiked interest rates another 0.5% at its meeting earlier this week.   And it’s probably not surprising that at the time of writing the ANZ, CBA and Macquarie have all passed on the rate increase to mortgage holders in full. Really, you can expect that all lenders will follow suit – they don’t really have much choice.   We’ve said before, you can expect the cost-of-living pain to get worse before it gets better.   For an owner-occupier with a $500,000 variable rate mortgage and 25 years to go, a 0.5% increase in the lending rate adds about $140 per month in repayments, making the total increase in mortgage repayments around $500 per month since May.   That’s not great news for many who are struggling, however there is some upside with some relief coming from petrol prices falling around 30 cents per litre, and the price of avocados dropping below $1 due to a massive oversupply! And just a reminder, the state government ... Read the rest of entry »

Inflation: it'll get worse before it gets better

Posted on Thursday, July 28, 2022
If, like many Australians, you’re starting to feel the pinch on rising costs like petrol and groceries, the bad news continues to come.   The latest inflation figures were released yesterday revealing a CPI increase of 6.1% over the year to 30 June. That’s a record high, but it’s not the sort of record we want to be setting.   Unfortunately, the inflation increase all but guarantees another 0.5% interest rate rise in August. And many economists expect price rises to get even worse before things get better, with inflation tipped to reach 7% by the end of the year.   The signs overseas are even worse, with inflation at a 40-year high of 9.1% in the US and 8.2% in the UK, while across the ditch in New Zealand it’s at 7.3% — a 32-year high. In other news, you may have heard that the state government is offering households a $250 rebate to compare and switch energy providers.   Pleasantly, it turns out it’s not a scam! How do I know? I ... Read the rest of entry »

Taking it one week (or month) at a time

Posted on Thursday, July 21, 2022
“We’re just taking it one week at a time.”  If you’re a footy fan, you hear it every week. And you might be tempted to take the same approach with your finances at the moment, given how quickly the world is changing. However, in the money world, I reckon the saying should be, “we’re just taking it one month at a time,” to fit in with the interest rate cycle. Pundits, myself included, are widely expecting another 0.5% rate increase in August, and the ANZ Bank has said it’s expecting that trend to continue through September and October as well. But I’m thinking the RBA might opt to fall back to 0.25% in September, to just test the broader health of the economy. As mortgage holders, we all know we need to be prepared for interest rate rises, which is why many among us are more concerned about our superannuation in the face of growing inflation. I’ve had multiple conversations recently where people have expressed concern about whether they have ... Read the rest of entry »

The share market is not yet at the bottom, NZ hikes rates again

Posted on Wednesday, July 13, 2022
Rising interest rates and high inflation have been the themes of the year so far, and in the US tomorrow morning our time I expect the latest inflation figures to show a 9% rise, which will also likely trigger the Federal Reserve to increase US interest rates by a further 0.75% later this month.   For a “nuts-n-bolts” explanation of how inflation works, check out my spot on 6PR this morning.   For those watching the US dollar, steep interest rate hikes and recession fears have lifted the greenback to the highest levels since March 2020. The surge could be a significant headwind for the profits of many large US firms, and another reason to expect a dimming earnings outlook.   Analysts Core Logic have said the market has not yet priced in any possible decline in earnings estimates this year. They say, “even if earnings estimates stay stable and especially if they decline, the stock market is going to have to fall further before we see an impor ... Read the rest of entry »
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