Here are the key things you need to know before you leave work today (or if you already work from home, before you shutdown your laptop).
MORTGAGE/LOAN RATE CHANGES
TSB has raised its home loan rates for terms 18 months and longer. The Op-operative Bank has also raise a few fixed rates. And Unity Money has raised its fixed 6 and 24 month mortgage rates.
TERM DEPOSIT/SAVINGS RATE CHANGES
Unity Money, and the Police Credit Union have both raised their TD offers.
THE PIPELINE IS DRYING UP
The number of new homes being consented is down -30% compared to a year ago. That is true for both stand-alone houses and townhouses. Consents for renovations are turning lower too now. And commercial building consents are weakening as well, their lowest monthly totals since January this year. After inflation, commercial consent levels are back to 2020 levels. It will take public sector work to prevent a full-scale downturn.
BETTER WEATHER PLANNING FOR FARMERS
NIWA has launched an AI-powered intermediate weather forecasting tool, bridging the gap between the 1-3 day forecasts and the long term climate modelling. Their newly launched tool provides week-to-week predictions of rainfall, dryness, and potential drought 35 days into the future. The outlook updates daily, capturing the latest changes in the climate system. It also offers long-term forecasts at a much higher spatial resolution than previously available. See this.
FEWER CAR SALES, VERY FEW ICE
There were 8150 new cars sold in September and 8921 used imports. From a year ago the new car sales were down -23% and the used ones up +21% (off an unusually low base - normal over the prior five years was about 11,600). The shift to electric cars and hybrids is happening fast. But to make a meaningful dent in our passenger car fleet before 2040, the adoption rate will need to pick up significantly from here.
LAUNCH FIZZER?
Realestate.co.nz had a softer than expected start to spring in September, with fewer listings and higher inventories. But with a bit of a burst on August sales, they are reporting little-change in the weeks of inventory available at 21 nationally, 23 in Auckland.
ELECTION POLICY RELEASES TODAY
The Labour Party released is LGBTQ+ policy today. ACT released its AML policy. And the Greens released policy for tertiary students to pay them $385/week as an allowance. These and all prior policy releases can be compared using this feature.
RISING
In Japan, sentiment among large businesses is improving, back to its best since March 2022.
FALLING
Despite that optimism, the Japanese PMI eased lower into contracting territory in September. And the Australain version did as well.
SWAPS FIRMER
Wholesale swap rates are probably moving up again today. But the real reaction will come at the close. Our chart will record the final positions. The 90 day bank bill rate is down -1 bp at 5.73% and now +23 bps above the OCR. The Australian 10 year bond yield is up +6 bps from this morning to 4.53%. The China 10 year bond rate is unchanged at 2.71%. The NZ Government 10 year bond rate is up +2 bps to 5.41%, but still well above the earlier RBNZ fixing of 5.29% which was up +3 bps today. The UST 10 year yield continues its rise, up +5 bps today to 4.63%. The UST 2yr has risen +2 bps, now at 5.09%.
EQUITIES MIXED
Some key equity markets are closed today, but the NZX is not one of them. It is down -0.4% in later trade. The ASX200 is trading but is very thin because most of the east coast in on holiday. It is unchanged in early afternoon trade. Shanghai and Hong Kong are closed for holidays. But Tokyo is open and up +1.6% in early trade. The S&P500 futures are signaling that Wall Street will open tomorrow up +0.5%, so the bounce from the Congressional debt deal is insignificant.
GOLD SLIPS AGAIN
In early Asian trade, gold is now at US$1846/oz and down another -US$ from this morning's open.
NZD HOLDS, UP
The Kiwi dollar is still at 60 USc where we opened this morning. Against the Aussie we are at 93.2 AUc and against the euro we are still at 56.7 euro cents, both unchanged from this morning. That means the TWI-5 remains at 69.9+.
BITCOIN FIRMER
The bitcoin price is much firmer today, now at US$27,876 and up +2.7% from where we opened this morning. Volatility over the past 24 hours has been modest at just over +/- 1.9%.
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65 Comments
https://www.trademe.co.nz/a/property/residential/lifestyle-property/listing/4073746254
This is how old bank executives spend their money. A massive house in the middle of nowhere (Central Hawkes Bay) built by Lindsay Pyne (ex BNZ).
What a nightmare to maintain.
Was not that identity involved in the BNZ failure, virtual insolvency and unrevealed scandal, that Winston Peters quite rightly railed against, culminating in his resignation from the Then National government and the birth of NZF. My recollection was said identity had baled out to Aussie Land never to return. Just goes to show what forgiving souls they’re up in those high and mighty circles.
Yes the swaps are still surging higher, US 10 yr now over 4.6% I see TSB was the next to move at the long end today on mortgages, most banks now seeing higher for longer. Seems like the only ones not seeing it are the RE commentators. House prices will not rise much with 7% mortgages, end of.
Well September was interesting.
My best ETF - Uranium - +13.5%
My best stock - Geo - +16% (finally some relief on this one)
My best crypto - Something called Nakomoto games - +90% (weeeee!)
All up:
My stock portfolio down 3.40%
My ETFs down 3%
My crypto portfolio up 5.65%
Still half in term deposits and USD. Glad I'm not in gold. Can't wait for the property market to get some recovery and I exit that into international funds, FIF tax be damned.
Oh yes.
No mortgage anymore. Tax paid off (well mostly). Term deposits and rental gives me a decent passive income.
Lots of dry powder to buy any bargains.
I will confess to a few sleepless nights when I had larger high risk stuff going on, but even my crypto portfolio might be considered boring now (mostly in BTC, ETH, stables).
Regarding stocks I haven't made a single sale so far, and maxed out so nothing to do there.
The 5-10% position is riskier? How? A catastrophic collapse in those assets leaves you with 90-95% of your wealth. A fairly run-of-the-mill property crash, the kind that can be expected every decade or two, leaves the second guy with nothing or underwater. Plus the myriad terrible things that can happen to a property beyond the market in general turning.
If I'm going to invest in productive enterprise I'd rather a greater degree of influence and return. Unless you're managing your own shares (which is beyond most laypeople), you're paying someone else to, at a fee, to get some level of security.
That's not me advocating property, just that shares are definitely riskier. The most lucrative ones are based on even shonkier fundemantals than some property. 100x earnings, definitely doesn't compute.
Managing shares is not complicated, and is very cheap these days, even for small investors. No reason to invest in just a few shonky miners or something, diversification has never been cheaper
I agree that many shares are individually more risky than a property, but asset allocation, concentration, and especially leverage make typical property portfolios far riskier than a small share portfolio.
Losing that 5% portfolio requires a catastrophic failure of risk management and the market. Many property investors would have lost 5% of their net worth in a bad month during the recent property crash.
Possibly, although most of them aren't evaluating their net worth on that frequent a basis.
Just anecdotally, most people I know dabbling in markets have never done that well. That's not to say some don't, but most are investing from complete amatuer positions. The more successful ones, are often a lot more directly involved in what they're investing in, or buying much larger chunks of businesses.
Closing your eyes does not make it go away.
Those anecdotes are common, many are seduced by quick money and risky shares rather than building a strong diverse portfolio. I have shares in about 30 companies mostly in NZ and Aus, and a few thousand more via KiwiSaver.
As mentioned elsewhere in the thread, the easiest approach is to buy a couple of ETFs, setting up an automatic payment to accumulate, and forgetting about it.
Funny to some perhaps, but explainable too. Firstly there are strong traditional and familial reasons supporting having a secure roof over your head. Secondly NZ , and hardly uniquely, has had its fair share of investment and security failures over long periods of time. JBL, Securitibank, Broadbank, RSL, Feltex to name just a few. Even Telecom one day Finance Minister Cullen is bemoaning the penchant for NZrs to invest in property instead of the equity markets, and a few days later his protege Cunliffe oversees the collapse of Telecom shares, a blue ribbon investment for all those mums and dads. Is it any wonder then that property, and in particular your home, is seen as a safe haven investment. If a property’s purpose is purely a home then it’s value simply rides up on down the market like boats in the harbour on the tides.
Glad I'm not in gold.
Why's that Wolfie? Sure the gold price is down 5.75% in Kiwi pesos over the past month. Still reasonably strong over the medium term and 110% over 10 years. That fits within the Ashley Church 7-10 year theory.
My worst performer over the month is silver, down 12%.
In your opinion..JC..and BTC was up for Sep so lots of guessing going on?
Open orders correlated with the price movement so not really a guess.
The following site shows you open interest positions.
Talking of stolen. Seymour plans to steal a day of our summer holidays (Effectively every salaried worker would work for free that day) and no-one seems to care. After 3 years of Covid ruined holidays I need a decent break.
It's really over rated. The extra liability and life energy required to take home over a million bucks a year doing actual productive enterprise is not worth the hassle. You're generally going to need to be turning over 5-10 million a year which becomes a pretty big beast with a lot of moving parts.
A meal is as good as a feast. Some people are into seeing how far they can go, fair play to them.
That said if I can deploy a new process or technology and greatly increase productivity I'll be all over it.
Hard not to go offshore sailing once its within reach.... you live for a good time not a long time and you cannot take it with you, though I took my 3 month old daugter , in fact she ate her first solid foods in a storm making yum yum noises.... great balance to this day and a fantastic horse rider.
He’s not stealing it, he’s balancing out Maturiki public holiday
staff already have..
- 4 weeks holiday pay
- Currently 12 public holidays
- 5 days sick pay per year is now at 10 (because of covid) which won’t be cut back to 5
About time small business got a kickback. Vote ACT
None of that is in any way unusual for the developed world and yet other countries make it work. Why can't our businesses cope with what would be considered minimal entitlements overseas?
Taking away holidays and workers rights will only drive more of the talented people away to countries that pay better and have better working conditions.
USA, two weeks annual leave. Memorial Day, Independence Day, Thanksgiving Day, Christmas Day, New Year’s day, and for a lucky few Presidents Day, Veterans Day. No Boxing Day, nothing at all at Easter. Sick leave three days. Working week plus Sat morning for many. In my experience over there that is all entirely negative. So much of life is spent at work it becomes a torpid workaday environment without any refreshment. Bloody counterproductive in my opinion.
New Zealand does have a high minimum wage, but 32 days off a year of leave is pretty much middle of the road by western Europe standards, and 10 days sick leave is far less than is typical in places like Austria or Denmark - and obviously not everyone takes it anyway so it's not the same as actual leave. They make it work, why can't we?
So you're right on one point, but why is minimum wage the standard for viability of business and not the average wage? How many more minimum wage jobs does our country need?
New Zealanders have low expectations of what things should cost, partially because we're accustomed to buying consumer goods made by people getting paid dollars an hour, or less.
We already have a high cost of living but it'd be worse if you were paying someone 75 grand a year to make you a hamburger.
We are an isolated island at the bottom of the world, we don’t produce much. Unfortunately we can’t compare ourselves to Western Europe. 90% of the staff I have will take their annual 10 sick days as it’s “their right” they’ll use sick pay cause they’re tired and as an employer there’s nothing I can do. Things have gone too far in the other direction
CHH Ecoply Rigid Air Barrier 2.4m x 1.2m, 7mm is AU$44 in Oz Bunnings and NZ$88 here at Bunnings. This is a very common plywood that is produced the same way, year after year, from locally sourced trees with decent economies of scale and less transport in NZ.
It’s not that we don’t produce stuff ourselves, we make the plywood, we just get away without forcing competition. We are just getting ripped of.
Great overview of the Buffet punt on the Japanese trading companies. Bet not too many of the wide-boy financial planners down in Nu' Zillun picked this. We (or Aussie) do not have any such companies capable of this.
Since the 1990s, the sogo shosha have shifted from a focus on trading to directly owning and running businesses as equity holders of companies and projects, which indeed has made them more comparable to U.S.-based Berkshire Hathaway.
Today the groups have a huge global presence as strategic investors in projects and entities in a range of industries, including energy, minerals, chemicals and food. Each one is like a combined logistics provider, financier, investment firm and consulting company
The sogo shosha now find themselves in a unique position to address the multiple complex challenges our world is facing. The most noteworthy of these are supply chain governance and the green transformation. Both require coordination and collaboration among players from different industries to create sustainable ecosystems.
https://asia.nikkei.com/Opinion/Warren-Buffett-is-right-to-be-proud-of-…
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