Market Insights – 27th May 2019

Market Insights – 27th May 2019

Market Insights

27th May 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

Wall Street’s major stock indexes edged higher on Friday after falling in the previous session, as hopeful comments from U.S. President Donald Trump regarding trade relations with China assuaged concerns among some investors.

– The Reserve Bank will go further than previously thought by cutting the cash rate not two, but three times before 2019 is over, according to a leading economist. Westpac chief economist Bill Evans , who in February became the first top economist from the big four banks to predict two rate cuts this year, said on Friday he now believes the central bank will go further into uncharted territory as it cuts from the long-standing record low of 1.5 per cent.

– The Morrison Government’s surprise election victory sparked a sigh of relief last week from investors and retirees across Australia, and public attention now turns to tax cuts. In just over a month, more than 10 million workers will be eligible to receive up to $1080 of tax rebates when they file their annual tax return. It’s the first stage of the Morrison Government’s massive income tax reduction program, and there have been calls for it to bring forward future stages by several years.

– Victorian property owners will face millions of dollars in new taxes to be unveiled in this year’s state budget. Treasurer Tim Pallas is expected to officially announced increased property taxes for heritage property and residential land owners on Saturday as well as an increase for foreign investors. The taxes are designed to go some of the way to addressing the $5.2 billion shortfall in stamp duty to be forecast in today’s budget.

– Iron ore magnate Gina Rinehart could hand over tens of thousands of hectares of pastoral land in the Fitzroy Valley to the State Government so it can develop a national park, as part of a $285 million plan to supercharge growth in the Kimberley cattle industry and create hundreds of jobs in the region. But the plan’s success hinges on getting a water licence from the Government.

– Woolworths investors and anti-gambling activists that want the supermarket to get out of its controversial pubs business should not expect any movement on the issue soon, sources close to the company said, with management’s focus instead firmly on fixing its loss-making Big W chain.

– The Reject Shop has struggled for relevance as the distinction between its business and other bargain-filled chains has become increasingly blurred. Retail experts say the embattled chain once occupied a unique place in Australian hearts, offering a range of playful and useful items for less than $5. But it has been pushed out by competitors traditionally belonging at a higher price point in the market.

Market Update

Australia’s outperforming share market may flatten out this week as the rest of the world catches up.

Despite a shaky end to the week, the ASX still closed up 1.42 points on Friday, while the US and European markets saw the squaring up of portfolios in anticipation for upcoming holidays on Monday.

Fresh Business Investment Figures will be released in Australia on Thursday, which are expected to show a modest fall for the March quarter.

But CommSec chief economist Craig James says economists will be looking more closely at the forward expectations that are also released with those figures.

“Overall, businesses are in pretty good shape, profits are reasonably high and certainly the fundamentals of the economy are in pretty good shape,” he said.

Also to be released later this week are economic growth figures in the United States and the Federal Reserve’s preferred measure of tracking inflation.

These figures come amid ongoing concerns over the US-China trade war.

“We’re continuing to watch the tweets coming out from President Donald Trump,” Mr James said.

“That remains the key focus this week … to see whether the talks restart.”

In Australia, futures trading is pointing to a flat start at the open on Monday, down two points, suggesting other markets around the world will catch up.

Mr James says the recent federal election gave the Australian share market a boost.

“Effectively, they didn’t have to deal with changes to capital gains tax and changes to things like franking credits and the like,” Mr James said.

“The status quo was returned in terms of federal politics.”

The Australian dollar has also been moving well, buying 68.92 US cents at 1703 AEST on Friday before jumping to 69.27 cents, compared to 68.71 on Thursday.

Share Watch

BetaShares Australian Investment Grade Corporate Bond ETF (ASX: CRED)

The fund aims to track the performance of an index (before fees and expenses) that provides exposure to a portfolio of investment grade fixed-rate Australian Corporate Bonds. The Fund’s strategy will preference securities offering superior expected excess returns over Australian Government bonds.

What we like. . 

– Aims to provide attractive income distributions, paid monthly, combined with compelling portfolio diversification benefits.

– Diversification & Defence; investment grade fixed-rate Australian Corporate Bonds have historically tended to rise in value when Australian shares have fallen, providing diversification benefits and defensive characteristics to portfolios

– Low cost – management costs only 0.25% p.a

Consider if CRED would help to further diversify your portfolio. Contact our office for personalised advice.

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

Plus 1 Group logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide

Latest Single Touch Payroll Update

Latest Single Touch Payroll Update

Single Touch Payroll Updates… Coming July 1st

Single Touch Payroll (STP)

From 1 July 2019, Single Touch Payroll will apply to all employers. Employers with less than four employees have the option to report quarterly, while employers with closely held employees (family members/related parties) are not required to report until 1 July 2020.

Once reporting through Single Touch Payroll, you will need to ensure that your employees register with a MyGov account, as they will no longer be issued with a payment summary at the end of the financial year. Their payment summary will be automatically generated by the ATO and will be accessible through their MyGov account.

We also remind all employers to double check that their Superannuation Guarantee obligations are up-to-date and to pay any outstanding obligations as soon as possible, to avoid penalties.

If you need advice regarding a new payroll software, to ensure that you are STP ready, we are happy to discuss the most cost effective solution for you!

For further information please click here https://www.ato.gov.au/Business/Single-Touch-Payroll/About-Single-Touch-Payroll/

Taxable Payments Annual Report (TPAR)

From 1 July 2019, the list of Industries required to lodge a Taxable Payments Annual Report (TPAR) has expanded to include all of the following:

  • Building and Construction Services
  • Cleaning Services
  • Courier Services
  • Road Freight Services
  • Information Technology Services
  • Security, investigation or surveillance services

Your software will be able to track the payments made to your contractors during the year, so that you can easily generate your TPAR report at the end of the financial year, at a click of a button!

If you need help to set up this function, please contact one of our helpful staff members.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

Market Insights – 27th May 2019

Market Insights – 20th May 2019

Market Insights

20th May 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

– Wall Street ended lower on Friday as continuing trade tensions pulled industrial and tech shares down, and the Dow capped a fourth straight week of losses in its longest weekly losing streak in three years.

– In the coming week, Reserve Bank events dominate following the Federal election. Governor Philip Lowe’s speech in Brisbane on Tuesday will hog the headlines immediately after the minutes of the May 7 Board meeting are issued. On the data front, the Bureau of Statistics (ABS) provides an update on construction work done.

– NAB has brought forward its forecast for a cash rate cut and now expects the Reserve Bank to act in both June and August, with a third 25 basis point movement to below one per cent possible in early 2020.

– ANZ Bank will stop offering its flagship financial advice service, as the industry grapples with the fallout from the fees-for-no-service scandal and the royal commission’s scrutiny. 

– Iron ore prices have leapt higher again pushing Rio Tinto shares through the landmark $100 level, in the wake of reports of low inventories and record steel production in China and fresh supply concerns from Brazil. Prosecutors in Brazil on Friday warned another dam belonging to the world’s biggest iron ore miner, Vale, could be at risk of rupture within days. 

– The major gold miners’ stocks are drifting sideways with gold, their early-year momentum sapped by the recent stock-market euphoria. But they are more important than ever for prudently diversifying portfolios, a rare sector that surges when stock markets weaken. 

– A former senior Facebook executive has called on governments and technology platforms to scrutinise the impact of social media on elections and opinions can be swayed after a surprise Coalition win in the weekend’s federal election. Facebook Australia and New Zealand’s former managing director Stephen Scheeler has warned the rapid change of online communication has changed the way people form opinions, including about politics, in ways that have real-world consequences.

Market Update

The Australian share market may enjoy a short-term bounce on the back of the coalition’s surprise election win, before quickly focusing elsewhere.

The initial focus this week will be the coalition’s re-election before attention turns to ongoing global trade tensions and any Reserve Bank (RBA) signals about the timing of interest rate cuts.

AMP Capital chief economist Shane Oliver expects the share market will quickly move on from the election result.

“With the return of the coalition with its more pro-business policies and uncertainty now removed around changes, it’s possible we will see a bit of a short-term bounce in the share market,” he said.

Dr Oliver said the coalition win removed uncertainty on excess franking credits, changes to negative gearing and capital gains tax adversely affecting the property market, and increased industrial relations regulation.

Property-related shares, banks and retail shares could be the key beneficiaries.

“Against this though the Australian share market has already performed pretty well over the last few months and is likely to be dominated by issues around global trade, slowing growth, interest rates and the iron ore price and so will quickly move on from the election I suspect.”

Futures trading was pointing to a very modest rise when the Australian share market opens on Monday.

US stocks dipped on Friday amid continuing US-China trade tensions, with the S&P500 index closing 0.6 per cent lower and the Dow Jones Industrial Average down 0.4 per cent.

The re-election of the coalition is expected to mean business as usual for the immediate economic policy outlook, in line with the policies announced in the government’s pre-election budget.

Ratings agency Fitch Ratings expects the re-election to bring broad policy continuity, with the federal government forecast to reach an underlying cash surplus by next financial year.

A challenging economic environment poses risks to this outlook, Fitch associate director Jeremy Zook said.

“The economy is slowing and the unemployment rate has inched up, which could weigh on fiscal revenues,” he said.

“A sharper economic slowdown could also lead to pressures for greater fiscal stimulus.”

Mr Zook said the likely continued need for crossbench support in the Senate could limit the government’s ability to advance some of its policy priorities.

“This poses additional risks to the budget outlook and the government’s ability to tackle medium-term economic reforms.”

RBA governor Philip Lowe will deliver a speech in Brisbane on Tuesday, immediately after the release of the minutes of the bank’s May board meeting when it kept the cash rate at a record low 1.5 per cent.

Dr Oliver expects both events will signal some sort of shift towards an easing bias on interest rates ahead of rate cuts in the months ahead.

National Australia Bank economists expect Mr Lowe will emphasise the bank’s easing bias and pave the way for a rate cut in June.

Share Watch

So often we talk about the need for individuals to have some exposure to International Shares in their investment portfolios, to provide alternative market exposure and diversification, whether this is a regular investment and/or superannuation.

The wealth of the world and new markets are mainly outside Australia.

The total return over 5 years for three well known stocks are as below;  

Apple  118%
Facebook 204%
Microsoft  220%

We recommend you view the below YOUTUBE link which gives a great indication of how various companies have moved up the ladder in terms of presence over the years.

https://www.youtube.com/watch?v=incIyXbJBd8&t=1s

 These days individuals can gain exposure to International Shares by various means including listings on the Australian Stock Exchange.

Please contact us here at the office if you would like to discuss any aspect of your financial position. 

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

Plus 1 Group logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide

Act Now to Maintain Your Insurance Cover

Act Now to Maintain Your Insurance Cover

Act Now to Maintain Your Insurance Cover

From July 1st 2019, new “Protect Your Super” laws come into effect.

These laws include several measures designed to ensure that super account balances are not being unnecessarily eroded by fees and insurance premiums, particularly for accounts with low balances, or accounts that have been inactive for a certain period.

One of these measures relates to automatic cancellation of insurance cover for inactive super accounts.

What does an inactive super account mean?

An inactive super account is considered “inactive” if it has received no contributions or rollovers for 16 consecutive months.

Will you be affected by the insurance changes?

A few examples of how your super fund could become inactive;

  • Being self-employed and not making super contributions
  • Doing a partial rollover from a fund into a new fund (an SMSF for example) and retaining a minimum balance in the fund to maintain insurance
  • Having two super funds, and your employer (or yourself) are contributing into one of the funds, the other would be considered “inactive”

What does an election mean?

An election will be your instruction to your super fund, instructing that you don’t want your insurance cover to be cancelled automatically.

Can I make a contribution into my account instead of making an election?

Yes, if you make, or receive a contribution into your account, either from you or from an employer, or you transfer super into your account from another fund, your account will no longer be considered inactive for the purposes of these rules.

However, you should keep in mind that the 16-month period will reset from the date the last contribution to your account is received. This means your insurance cover could be at risk again in the future if your account becomes inactive.

Further; Superannuation accounts with balances less than $6,000 that have been “inactive” for 16 months will be transferred to the ATO. The ATO will be responsible for consolidating a member’s inactive accounts with their active account.

For help with taking control and better understanding your superannuation and insurance options come along to our interactive workshop here at our office on May 29th at 5:30pm or contact our team for a free consultation.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

plus-1-logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

Market Insights – 27th May 2019

Market Insights – 13th May 2019

Market Insights

13th May 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

– In the coming week in Australia, the economic data spotlight is firmly on wages (Wednesday) and the job market (Thursday) – the last key indicators released before the Federal election.

– The Reserve Bank has confirmed its downgraded near-term economic growth forecasts, but has kept its longer-term expectations unchanged. The RBA said on Friday it now expects annual GDP growth to June of 1.75 per cent, compared to the 2.25 per cent it flagged six months ago, with the December target downgraded from 3.0 to 2.75 per cent. 

– Weak household spending and deteriorating property prices have prompted the Reserve Bank to downgrade its forecasts for growth and inflation, just eight days out from the Federal election. Economists say an interest rate cut is all but inevitable now, given underlying inflation is not expected to rise above 2 per cent for another two years. 

– News Corp shares are up after it posted $US23 million ($A32.9 million) net income for the third quarter, with the consolidation of Foxtel and a strong performance by HarperCollins offsetting a decline in news and information earnings. The result compared to a net loss of $US1.1 billion a year ago – when the Rupert Murdoch-controlled media firm revalued its Foxtel and Fox Sports Australia operations. The company’s ASX-listed shares were up 1.69 per cent to $16.86 at 1135 AEST on Friday.

Market Update

The Australian share market is expected to start the week positively, after the US over the weekend described its trade talks with China as “constructive”.

The ongoing trade issues between the US and China and the latest Australian jobs figures will be the main focus for domestic financial markets this week, overshadowing this Saturday’s federal election.

AMP Capital’s chief economist Shane Oliver said it looked like Australia’s share market would open positively with a reasonable gain after US President Donald Trump described the latest trade talks with China as constructive, and China said they would continue.

“There’s still optimism that the trade issue will be resolved,” Dr Oliver said.

The release this week of the April jobs data will be key locally given the focus placed on the unemployment rate by the Reserve Bank of Australia when it opted to keep the cash rate at a record low 1.5 per cent last week.

Share Watch

Fidelity Future Leaders 

This is a managed fund which provides investors with the potential for long-term capital growth by investing in a portfolio of listed mid and small-cap Australian shares. It delivers significant diversification benefits by investing in 40 to 70 Australian companies.

Of recent, the fund outperformed the index over the quarter (ending 31 March 2019) Strong earnings boosted returns from selected conviction holdings, notably in the information technology and financial sectors. Selected positions in the real estate and health care sectors also supported performance. 

Fund Objective is to achieve returns in excess of the S&P/ASX Mid Small Index over the suggested minimum investment time period of five to seven years.  

Total Return %

1 Yr

3 Yr

5 Yr

Income 

3.24%

1.77%

1.84%

Growth

10.24%

13.59%

12.33%

Total Return %

13.48%

15.36%

14.17%

As stated, Fidelity Future Leaders is a managed fund, generally you need a “platform fund” established to purchase these managed funds, if you see this is something you would like to learn more about, or invest into, contact our office on 03 58 333 000.

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

Open Hours

Monday to Friday
8:00am to 5:00pm

Closed Public Holidays

Plus 1 Group logo

If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

Contact Us

27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us

CPA Logo
Professional Standards Legislation logo
Platinum Xero Partner
MYOB logo
Quickbooks logo

Sentinel Wealth Unit Trust T/As Plus 1 Wealth Advisors (ABN:11 408 695 672) is an Authorised Representative of Sentinel Wealth Managers Pty Ltd
(ABN: 73 108 328 294) AFS Licence 322211 | Financial Services Guide