Client Economic & Investment Update - March 2014
-
Upload
baiocchi-griffin-private-wealth -
Category
Economy & Finance
-
view
138 -
download
1
description
Transcript of Client Economic & Investment Update - March 2014
![Page 1: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/1.jpg)
Slide 1
Economic and
Investment Markets Update
20th March 2014
![Page 2: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/2.jpg)
Slide 2
This presentation and the associated discussion is general
in nature and does not take your individual situation into
account. You should not act on anything contained
herein, or discussed as a consequence of the contents of
this document, without receiving personal financial
advice from a suitably qualified person such as a
financial advisor.
![Page 3: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/3.jpg)
Slide 3
A look at the global economic environment
&
Australia: the State of the Nation
&
An update on investment markets
![Page 4: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/4.jpg)
Slide 4
![Page 5: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/5.jpg)
Slide 5
The US economy has continued to improve, despite a very cold winter and cuts to government spending
![Page 6: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/6.jpg)
Slide 6
![Page 7: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/7.jpg)
Slide 7
The start of the Reagan years
The end of Obama’s first term
![Page 8: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/8.jpg)
Slide 8
US Government Debt as a Percentage of US GDP
US Government Debt is projected to reach World War II levels
![Page 9: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/9.jpg)
Slide 9
How will the US Federal
Reserve manage its
gradual withdrawal of
monetary stimulus?
![Page 10: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/10.jpg)
Slide 10
China is growing quickly, but US economic dominance is expected to last for some time
![Page 11: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/11.jpg)
Slide 11
Significant growth in US gas and oil production
![Page 12: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/12.jpg)
Slide 12
The cost of a gallon of petrol in US$
Cheap
Expensive
Neither cheap nor expensive
![Page 13: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/13.jpg)
Slide 13
No change
in 5 years
![Page 14: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/14.jpg)
Slide 14
Europe’s problems primarily stem from:
• Too much government debt (still)
• Inflexible labour market (compared to the US)
• High energy and labour costs
![Page 15: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/15.jpg)
Slide 15
“Dangerous” level of debt
![Page 16: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/16.jpg)
Slide 16
![Page 17: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/17.jpg)
Slide 17
China US
Europe
![Page 18: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/18.jpg)
Slide 18
China has been the
primary driver of the
commodities boom
![Page 19: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/19.jpg)
Slide 19
Canada, Brazil, Saudi Arabia
and Australia –key mining investment destinations
for China
![Page 20: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/20.jpg)
Slide 20
The US, Brazil, and Australia –
key agricultural investment destinations
for China
![Page 21: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/21.jpg)
Slide 21
![Page 22: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/22.jpg)
Slide 22
The global economy is recovering, but progress is slower than usual
![Page 23: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/23.jpg)
Slide 23
![Page 24: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/24.jpg)
Slide 24
Overall GDP
Contribution to GDP Growth
Mining investment
Non- Mining investment
Housing
![Page 25: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/25.jpg)
Slide 25
Housing interest rates
RBA Cash Rate
![Page 26: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/26.jpg)
Slide 26
First home buyers are priced out of the market
Demand is largely from investors and existing homeowners
Loan approvals and housing
credit are improving
![Page 27: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/27.jpg)
Slide 27
Outside of Sydney and
Melbourne, house price growth is only average
at best
![Page 28: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/28.jpg)
Slide 28
The ‘GFC’Households
are still focused on
debt reduction and are
reluctant to spend
![Page 29: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/29.jpg)
Slide 29
A slight improvement in retail sales
growth figures
![Page 30: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/30.jpg)
Slide 30
![Page 31: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/31.jpg)
Slide 31
Unemployment in an upward trend
![Page 32: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/32.jpg)
Slide 32
Housing construction Unemployment
Interest rates Mining slowdown
Retail sector China
![Page 33: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/33.jpg)
Slide 33
US Fed ‘taper’
Emerging market concerns
Russia & the Ukraine
ASX All Ordinaries Index
![Page 34: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/34.jpg)
Slide 34
1987 crash
‘Dot com’ bubble
Pre-GFC peak
Market low –Mar 2009
“The recession we had to have”
![Page 35: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/35.jpg)
Slide 35
ASX All Ordinaries Index
![Page 36: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/36.jpg)
Slide 36
• Australian economic growth will be weak for the next 12 to 18 months (although exports may be high)
• Interest rates steady until late 2014 or early 2015 as housing construction increases pace
• The global economy is improving, but further easing in China will impact Australia (no more ‘ghost cities’ likely to be built)
• Our investment approach remains focused on:- Companies with sound balance sheets and reliable dividends (WOW, WES, TLS)- Conservatively-geared property trusts (BWP, GPT)- Selective exposure to ‘unloved’ cyclicals (TOL, LEI, QBE)
![Page 37: Client Economic & Investment Update - March 2014](https://reader035.fdocuments.in/reader035/viewer/2022070323/5597750a1a28ab88698b45d3/html5/thumbnails/37.jpg)
Slide 37
?