A week after the US Federal Reserve cut interest rates by 50 basis points, the RBA once again left the official cash rate on hold last week. In this report, we look at the impact on markets of the RBA’s decision to refrain from following the lead of the Fed, and the likely timeline for an eventual rate cut.

The extraordinary rally in the Big 4 banks is difficult to reconcile with the fundamentals, with the sector trading at an all-time PE multiple despite having a tepid earnings growth outlook. The sector’s strength can be partly attributed to the rotation of capital into the major banks as a source of ‘relative safety’ compared to the under-pressure resources sector.

Global growth momentum has softened somewhat in recent months, led by slower growth in the world’s major economies. In this report, we assess prospects for the global economy, against a developing global rate cut cycle, structural challenges in China and the uncertainty created by the US election.

Webjet (WEB) is in the final stages of demerging its well-known Webjet B2C business (principally the Webjet online travel agent), from its lesser-known - but much larger -B2B business, WebBeds. We expect the spin-off to drive a re-rate of WEB’s combined market valuation as the strong growth outlook of WebBeds should be more appropriately valued by the market as a stand-alone business.

Despite some near-term choppiness in global equity markets, the backdrop for global equities remains reasonably supportive with rate cuts and a soft landing. The US Federal Reserve is widely expected to kick off a significant rate cutting cycle this week, with at least three 25 basis point cuts by year end.

The Australian economy remains in an unusual spot, beset by sluggish headline growth alongside sticky inflation, a relatively tight labour market and low productivity. In this report, we examine the outlook for Australia’s economy heading into 2025, including the challenges of rebalancing and when the RBA is likely to ease policy.

The August 2024 reporting season featured a mixed set of results that were ‘better than feared’ overall, amidst cautious sentiment surrounding the strength of the corporate sector. In this report, we summarise the key themes from reporting season, with a focus on the retail sector, consumer staples, healthcare, insurance, and the 'Big 4' banks.

Australian equities pushed higher through August, as US recession fears and Japanese carry trade selling subsided quite quickly. In this report, we look at the implications for Australian equities of elevated PE levels, as well as prospects for a rate cut from the RBA.