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The world is entering a higher cost environment which will hit the profits of companies in many sectors. A key beneficiary will be commodities, where supply shortages are meeting increasing demand from AI and green energy.
With investors gravitating towards ‘safer’ equities for yield, the equity risk premium is playing an important role in the variance of earnings multiples between defensive and cyclical sectors of the Australian equity market.
A recent change to banking regulation has significant implications for term deposits. With 31+ day break or notice clauses becoming more common, a large difference in deposit rates is expected.