View the slides from our Investment & Economic Strategy presentation.
Default Section | 1 |
Slide 1: Investment & Economic Strategy Lunch Cameron Harrison | 1 |
Slide 2: Speakers | 2 |
Slide 3: Cameron Harrison Strategy The Lucky Muddling Country | 3 |
Slide 4: Reason #1: Monetary Policy isn’t what it used be… | 4 |
Slide 5: Reason #1: Monetary Policy isn’t what it used be… | 5 |
Slide 6: Reason #1: Monetary Policy isn’t what it used be… | 6 |
Slide 7: Reason #2: Population Growth provides sugar hit to GDP | 7 |
Slide 8: What Comes Next? | 8 |
Slide 9: #1 China: The Other Hard Landing | 9 |
Slide 10: #2 Inflation will be Structurally Higher | 10 |
Slide 11: #3 Fiscal to Dominate Monetary Policy | 11 |
Slide 12: Implications for Financial Markets & Investors? | 12 |
Slide 13 | 13 |
Slide 14: Minack Advisors The cycle will get worse before it gets better | 14 |
Slide 15: The cycle will get worse before it gets better But there will be great opportunities in the next cycle! | 15 |
Slide 16: Outline | 16 |
Slide 17: Outline | 17 |
Slide 18: Policy makers focused on controlling the biggest inflation breakout in 40 years | 18 |
Slide 19: The nub of the inflation problem is now service sector prices (US) | 19 |
Slide 20: The nub of the inflation problem is now service sector prices (Australia) | 20 |
Slide 21: Wages are normally the key to service sector inflation (US) | 21 |
Slide 22: Wages are normally the key to service sector inflation (Australia) | 22 |
Slide 23: How far will unemployment need to rise to slow wage growth? | 23 |
Slide 24: Wages are starting to slow without unemployment rising! | 24 |
Slide 25: Wage/unemployment trade-off hasn’t changed in Australia | 25 |
Slide 26: Rising labour supply will help damp wage growth in Australia | 26 |
Slide 27: Temporary support for growth #1: excess savings | 27 |
Slide 28: Temporary support for growth #2: unusual long rate behaviour | 28 |
Slide 29: Temporary support for growth #3: unusual consumer behaviour | 29 |
Slide 30: Temporary support for growth #3: unusual consumer behaviour | 30 |
Slide 31: Temporary support for growth #3: unusual consumer behaviour | 31 |
Slide 32: Temporary support for growth #4: unusual fiscal policy | 32 |
Slide 33: Monetary policy is now tight, so growth will slow | 33 |
Slide 34: Australian income growth slumps | 34 |
Slide 35: Running down the saving buffer | 35 |
Slide 36: Some of the excess saving was used to pre-pay mortgages | 36 |
Slide 37: What were excess payments are now required payments | 37 |
Slide 38: The mortgage cliff: the re-setting fixed rate mortgage schedule | 38 |
Slide 39: Outline | 39 |
Slide 40: Equities and downturns | 40 |
Slide 41: Equities and downturns: equities always sell off in a recession | 41 |
Slide 42: Equities and downturns: sometimes equities sell off without a downturn | 42 |
Slide 43: Equities and downturns: equities are not very far-sighted | 43 |
Slide 44: The landing – soft or hard – matters for equities | 44 |
Slide 45: This year’s rally is pricing in next year’s soft landing | 45 |
Slide 46: Outline | 46 |
Slide 47: What changes – More capex #1: more resilience | 47 |
Slide 48: What changes – More capex #2: more defense | 48 |
Slide 49: What changes – More capex #3: climate mitigation | 49 |
Slide 50: What changes – More capex #4: more infrastructure | 50 |
Slide 51: What changes – More capex #5: more labour-replacing investment | 51 |
Slide 52: What changes – More fiscal, which means V-shaped cycles | 52 |
Slide 53: Investing in the next cycle #1: lower safe asset returns | 53 |
Slide 54: Investing in the next cycle #2: equity-bond correlation flips | 54 |
Slide 55: Investing in the next cycle #3: financial leverage will be much less attractive | 55 |
Slide 56: The nuanced relationship between rates & equity valuation | 56 |
Slide 57: Japanese equities de-rated with zero rates | 57 |
Slide 58: The essential bubble ingredient: high EPS expectations | 58 |
Slide 59: 15 years of no gains for global equities (ex-US) | 59 |
Slide 60: Post-GFC US out-performance driven by EPS, not rates (or QE) | 60 |
Slide 61: Post-GFC US out-performance driven by EPS, not rates (or QE) | 61 |
Slide 62: US EPS growth was narrowly based | 62 |
Slide 63: The US was the valuation exception over the past cycle | 63 |
Slide 64: Investing in the next cycle #4: equity leadership change | 64 |
Slide 65: Investing in the next cycle #4: equity leadership change | 65 |
Slide 66: Investing in the next cycle #4: equity leadership change | 66 |
Slide 67: Investing in the next cycle #5: blessed are the goods makers | 67 |
Slide 68: Investing in the next cycle #5: blessed are the goods makers | 68 |
Slide 69: Investing in the next cycle #5: blessed are the goods makers | 69 |
Slide 70: Investing in the next cycle #5: blessed are the goods makers | 70 |
Slide 71: Investing in the next cycle #5: blessed are the goods makers | 71 |
Slide 72: Investing in the next cycle #6: it may pay to be active, not passive | 72 |
Slide 73: Investing in the next cycle #6: it may pay to be active, not passive | 73 |
Slide 74: Investing in the next cycle #6: it may pay to be active, not passive | 74 |
Slide 75: Investing in the next cycle | 75 |
Slide 76: Investing in the next cycle | 76 |
Slide 77: Investing in the next cycle | 77 |
Slide 78: Investing in the next cycle | 78 |
Slide 79: Investing in the next cycle | 79 |
Slide 80: Investing in the next cycle | 80 |
Slide 81: Key point #1: there will be a landing, soft or hard, but no landing makes no sense | 81 |
Slide 82: Key point #2: equities are pricing in a soft landing | 82 |
Slide 83: Key point #3: equity leadership is set to change | 83 |
Slide 84: Minack Advisors | 84 |
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