Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete Wargent is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"Pete's daily analysis is unputdownable" - Dr. Chris Caton, Chief Economist, BT Financial.

Thursday, 30 April 2015

US recovery stall?

GDP stinker

Well...US GDP was reported overnight and it was a stinker, far below even expectations of a weak result of 1 per cent growth.

It had seemed that the US economy was recovering nicely, with real GDP growth apparently picking up steadily over time.



Moreover, payrolls growth until lately had been recording some astonishing gains, which had been to some extent also supported the JOLTS survey and jobless claims.

GDP slows to crawl speed

Over the past three quarters, however, GDP appears at face value to have slowed from an annualised pace of 5 per cent in Q3 2014, to 2.2 per cent in Q4 2014, to just 0.2 per cent in Q1 2015.

Which is a crawl.

First quarter growth had been weak in 2014 too, blamed on bad weather, but this result was in no way encouraging, and was in any case propped up by inventories (which will thus act as a drag in the next quarter).


Hikes pushed out

In all likelihood, this soft result effectively rules out the chances of an imminent rate hike by the Federal Reserve.

Interestingly the United Kingdom has recently experienced a similar dynamic with record high employment and unemployment declining to just 5.6 per cent.

Yet "Cool Britannia" saw a very weak preliminary GDP result reported for Q1 2015, suggesting that productivity may be in the gutter.

The wrap

None of the above is particularly helpful to the Reserve Bank in Australia, which is on balance looking for a lower dollar at around US ~70 cents, yet instead now has a dollar at US ~80 cents.

Markets weren't quite sure what to make of the US GDP result, but the pressure seems to be on for another rate cut to be delivered in Australia. 

Failure to cut rates could see the dollar creeping back above US 80 cents.

Iron ore futures are getting walloped today too...