For over a year, shares in our big four banks have been trending down. Go back even further, and their share prices have barely moved in a decade. In May 2017, Australia’s largest bank (and biggest stock), Commonwealth Bank of Australia [ASX:CBA], got within a whisker of $88. Fast forward to June 2018, CBA’s share price traded below $68 — a fall of around 23%. It’s not just CBA feeling the pinch, though.
At time of writing, Macquarie Group Limited’s [ASX:MQG] shares are trading at just over $125.00, breaking their 52-week high of $125.290, which was hit only yesterday. As the largest Australian investment bank, and the top ranked merger and acquisitions advisor in the country, Macquarie Group rely on well-played market moves to secure their profits.
National Australia Bank Limited [ASX:NAB] dropped today by 1.27% ($0.35). As expected, due to the ongoing investigations conducted through the Royal Banking Commission, NAB has experienced a high level of volatility within the last 12 months. Stories of bad behaviour seem to be everywhere we turn.
Crypto is a technology revolution. It’s evolving, improving, expanding and changing. That's why we believe the BIS report on the death knell of bitcoin is wrong.
Prime Minister Malcolm Turnbull may be one step closer to passing corporate tax cuts. This comes after One Nation’s Senator, Pauline Hanson, backflipped and announced she would back the company tax plan. Ms Hanson struck a deal with the Turnbull government. But what does this tax cut plan mean for Aussie businesses and workers?
This is why Grant and others have been saying the 35-year long bond bull market is at an end. The biggest participant in the market (the Fed) is no longer propping up bond prices. Grant believes US 10-year treasury bond yields could reach 4.5%. Such an increase in bond yields would cause millions of investors to flow out of stocks and into bonds.
It was a truly nightmare week on the markets. If you trust the US Fed to be able to smoothly unwind its emergency low-interest rate policy without crashing a market bloated on low rate-driven investment, then you probably aren’t worried. If you don’t have that much faith in the Fed, you might see them as having painted themselves into a corner.
The Dow Jones dropped 1,175 points on Monday — the largest single-day point drop in history —erasing all profits made so far this year. The 4.6% decline is the biggest percentage loss the Dow has suffered since 2011, when we saw a drop of 1,089 points on 24 August.
Central banks are the powerful beating heart of this system. They’re both the market makers and the price setters when they want to be. It’s a case of free market, what free market? Make no mistake, this is big government with big influence. If markets don’t slow down or correct by the end of 2018, the 2019 crash could be far worse.
Right now, pass the cash parcel is in full swing, and central banks are only very timidly trying to reduce the size of the parcel. That’s basically why you’ve seen the US stock market rise unimpeded for the past two years. Central banks are behind the curve. There is too much cash in the system given the positive investor psychology that is unfolding.