Episode 36: What does the slowing of the Australian economy mean for the stock market?

Mar 12, 2019 | Podcast Episodes

There’s certainly been a trend towards moderation in economic growth here in Australia and in the US. In some regards, when you look at the commentary made late last year by the US Federal Reserve and their hawkish remarks around interest rates, and then the quick change of their position, it makes you wonder… what where they looking at?

US GDP growth for the 4th quarter grew at just 2.6%, which is down from the brisk 3.4% at the end of the 3rd quarter last year, and down from 4.1% the quarter before. No doubt, there is some temperance in US economic growth, which is largely the result of the interest rate increases from 2018.

Australian economic growth is moderating as well, due to a number of factors, including :wages increasing at a fairly modest pace, households taking on an increasing amount of debt, low interest rates, and a softening in housing costs. These factors are impacting consumer behaviour, which is flowing into retail sales; with data showing pretty soft results in the past week.

So where to from here? Listen in for more on what this means for Australia.

This Week’s Investor Exchange Round Table Covered:

  • Some economists predict interest rates will go down to 1%, and debates are circulating that going below 1% causes more damage than good. However there is a case for offsetting higher funding and borrowing costs. Does that mean doom and gloom? Are we sitting on the precipice of a recession? Tune in for our insights (10:26)
  • The property market continue to decline slowly, with commentary stating the majority of the Australian property market will be slow for most of 2019. If that’s the case and you are considering buying, what does that mean for you? Listen in for insights from SQM research and CoreLogic on Sydney, Melbourne and Brisbane, now. (19:40)
  • Louis’s next step in getting your finances in order this year is: review your insurances. Start to think about the ‘what if’ situations. You can do all the great planning with your finances that you like, but if something happens to your health or your ability to earn an income, you need to be protected. Tune in for Louis advice on this important topic. (38:02)

You Cannot Be Serious this week:

A woman in Ireland called the police to say she has been scammed. She said she paid over 200 pounds got brown sugar instead of what she wanted. Instead of what they asked? Cocaine! Nothing beats a sugar high?

A man went to his doctor with a blocked nose, that had been blocked for two years. What was the cause? His body was growing an extra tooth… in his nasal cavity!

Listener Questions:

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The Investor Exchange Theme Music: “Happy Happy Game Show” by Kevin MacLeod (incompetech.com) Licensed under Creative Commons: By Attribution 3.0.

 

 

 

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The Investor Exchange

The Investor Exchange is weekly podcast where the expert panel share banter, tips and insights on how to grow and manage wealth.

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