Rate hike next week; Middle East embassies shut; robotaxis sans steering wheels

Rate hike next week; Middle East embassies shut; robotaxis sans steering wheels

News in brief

The Australian diplomatic missions in Tel Aviv, Abu Dhabi and Dubai have been shut down due to threats posed by middle and drone attacks.

 

One-time maverick MP Matt Canavan has been elected leader of the federal National Party, immediately calling for more Australian farming, more Australian manufacturing and more Australian jobs.

 

Federal Treasurer Jim Chalmers yesterday said Australia won’t be immune to volatility in the energy market, but the global economic turmoil won’t prevent economic reform in the May budget.

 

The federal government will pump $200 million into ASX-listed cloud, cybersecurity and telecommunications company Macquarie Technology Group to help keep Australian data onshore and create jobs in technology and artificial intelligence.

 

Amazon-owned Zoox wants to put a very specific kind of robotaxi on US roads: one without a steering wheel or pedals. The company has asked US regulators to allow it to deploy purpose-built vehicles that do not look or drive like a traditional car.

Fear-o-meter

Lessons from history: Schroders head of research, Duncan Lamont

 

History provides some reassurance that kneejerk reactions aren’t necessary in times of turmoil.

 

Volatility is inevitable and occurs more often than people may realise. Over the past 54 calendar years, global equities have experienced, at some point during each year, a 10 per cent or more decline in 31 of those years.

 

Even though markets can experience major downturns over the course of a year, in the past the average gains made during the year have more than offset the losses.

 

Trying to time the market, by moving into cash during periods of high volatility, can greatly diminish long-term returns. Investors who moved into cash when the Chicago Board Options Exchange Volatility Index (VIX) was above its historical average and then moved back into stocks when the VIX came down below that average, would have reduced their returns since 1990 by nearly 80 per cent.

 

Stocks have a far better track record than cash of delivering returns that beat inflation - over both the long and short term. Cash may seem like a safe investment, but it’s not safe to the extent that it hasn’t historically matched stocks’ track record for delivering inflation-beating returns.

Fear & Greed Q+A today

On queues outside the ABC Bullion store, and why he says the last six months has been the strongest on record for demand from high-net-worth investors and self-managed super funds:

 

“You also have family offices and high-net-worth investors who might be putting $10 million, $20 million or even $30 million into physical metal. Importantly those investor cohorts will almost always store that metal rather than self-store it.

 

But we also see mum and dad Australians putting $10,000 or $20,000 into bullion, and in the last three years we’ve seen a near tenfold increase in the use of our gold saver product, which allows people to start investing in gold from as little as $50 a month.”

 

General information only. Seek advice tailored to your circumstances before making investment decisions. ABC Bullion is a partner of Fear & Greed.

Two of the four big banks now expect interest rates to rise next week while professional investors have pushed up bond yields – which reflect rate expectations – to their highest level in more than a decade. National Australia Bank and Westpac expect a lift in the official cash rate both next week and in May, taking it back to 4.35 per cent, equal to its highest level in 13 years. That would feed through to mortgage rates, and amounts charged on business loans and credit cards. The shift came after RBA deputy governor Andrew Hauser said it would be “bad for everyone” if the central bank didn’t act decisively.

Greed-o-meter

SYDNEY–LONDON
Business	Airline	Economy
10,296	Etihad	—
10,362	China Southern	—
11,866	Emirates	2171
17,974	Singapore Airlines	3780
MELBOURNE–ROME
Business	Airline	Economy
9889	Qatar Airways	1464
9897	Emirates	1461
15,914	Cathay Pacific	2855
16,883	Thai Airways	—
—	Singapore Airlines	4610
BRISBANE–PARIS
Business	Airline	Economy
8904	Qatar Airways	1885
12,586	Singapore Airlines	—
—	Malaysia Airlines	2503
14,543	Cathay Pacific	2668
* Travel in last week of April

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Strong demand for Asian airlines during the Iranian conflict has seen their airfares rise, compared to carriers based in the Middle East.

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Source: Webjet, reported in The Australian