Oliver’s Insights: The impact of the US/Iran war on economies and markets – Q and A

The key points are:

• Uncertainty around the duration of the US/Israel war with Iran has intensified with oil prices spiking to $US119/barrel only to then plunge as President Trump hinted that the war may be close to over. This is in turn driving big gyrations in investment markets.  

• While a limited war remains more likely than a long war, it could still push oil prices higher & shares lower in the near term. Trump may be getting close to an off ramp though. 

• For the RBA, there is a strong case to wait till May on rates as the boost to inflation could prove temporary.

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Oliver's Insights: Gulf War 3 – the threat to economies and markets from the US/Iran war

The key points are:

• The start of a war between the US and Israel and Iran poses the risk of a significant disruption to global economic growth given the likelihood of significant disruption to the supply of oil, particularly through the Strait of Hormuz.

• This in turn could contribute to a correction in share prices.

• A $US40 a barrel spike in oil prices could add 40 cents a litre to petrol prices with a threat to growth & inflation. As a “tax on spending” the RBA should look through it.

• For investors: share market falls are normal, timing markets is hard and the key is to stick to a long-term strategy.

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Oliver's Insights: The outlook for Australian shares – is the long underperformance versus global shares over?

The key points are:

• Over the long-term Australian shares have been a relatively strong performer, but it does go through relatively long periods of out and underperformance versus global shares.

• We see more upside in Australian shares supported by the return of profit growth. And its underperformance over the last 16 years is getting long in the tooth.

• Nine key charts worth watching are: business conditions PMIs; US tariffs; inflation; inflation expectations; profit growth; share market valuations; the rotation trade from tech to non-tech shares; the $US; and geopolitical risk. At present they are sending mixed signals.

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Oliver's Insights: Nine key charts for investors to keep an eye on

The key points are:

• This year has started off rather messy with geopolitical threats and worries around AI disruption and valuations.

• We are mildly upbeat on shares for the year but see a 15% or so correction as likely along the way.

• Nine key charts worth watching are: business conditions PMIs; US tariffs; inflation; inflation expectations; profit growth; share market valuations; the rotation trade from tech to non-tech shares; the $US; and geopolitical risk. At present they are sending mixed signals.

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Oliver's Insights: Inflation, rate hikes and public spending – Q&A

The key points are:

• Keeping inflation low and around the 2-3% target is important in terms of maximising living standards in Australia.

• We are optimistic that much of the recent rise in inflation will prove temporary.

• But some may reflect the economy hitting capacity constraints as a pickup in household and business spending combines with historically high levels of public spending.

• The best things governments can do to help lower inflation is reduce the level of spending in the near term and help boost the supply side of the economy in the long term.

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Oliver's Insights: The RBA starts the year off with a rate hike

The key points are:

• The RBA hiked its cash rate by 0.25% to 3.85% as widely expected in response to inflation running above target.

• Its commentary was cautious and hawkish with inflation now expected to stay above target for longer even with assumptions for two more rate hikes and the stronger $A.

• We thought it was a close call and leaned to a hold. But having hiked we expect the RBA to hold for the remainder of the year as we see underlying inflation as having peaked in the September quarter and falling back to target.

• Valid concerns about capacity constraints though are likely to keep the risk of a further rate hike high.

• The best thing government can do to help alleviate this is to lower the level of public spending.

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Oliver's Insights: 2026 investment outlook: Expect a rough but, ultimately, OK ride

The key points are:

• 2025 was another strong year for investors with shares up strongly on the back of better than feared growth and profits and global central banks cutting rates. Balanced super funds returned around 9%. Volatility rose though mainly on the back of worries about Trump’s tariffs.

• 2026 is likely to see good returns but after the strong gains of the last three years, its likely to be more constrained. And another 15% plus correction is likely along the way again.

• We expect the RBA to leave rates on hold, the ASX to return around 8% and balanced growth super funds to return around 7%. Australian home price gains are likely to slow to around 5-7%.

• The key things to watch are: interest rates; the AI boom; US midterms; China; geopolitics; and the Australian consumer. 

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Oliver's Insights: 2025 turned out pretty good, but what about 2026? Still at the bliss point?

The key points are:

• The key themes for 2025 were: tariff turmoil; global resilience helped by AI enthusiasm; sticky inflation; lower rates; and lots of geopolitical noise. For the third year in a row, returns were strong, albeit they slowed. 

• 2026 is likely to see volatility around US politics, geopolitics & central bank rates at the lows, but returns should be ok. 

• Expect the RBA cash rate to hold at 3.6%, the ASX 200 to rise to 8900 & balanced super funds to return around 6.8%.  

• Australian home price gains are likely to slow to 5-7% with poor affordability and a less favourable rate outlook. 

• Key things to keep an eye on are interest rates, the US midterms, AI enthusiasm, China, & Australian consumers.

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Oliver's Insights: The RBA holds rates at 3.6% and warns of rate hikes next year if needed

The key points are:

• The RBA left its cash rate on hold at 3.6% as widely expected at is December meeting.

• Its commentary also became more hawkish (ie leaning towards a rate hike) on the back of the further rise in inflation in October. Governor Bullock reiterated that the Board will be data dependent and effectively warned it may have to raise rates if inflation does not fall back.

• We now expect the RBA to leave rates on hold next year with a fall back in inflation and still fragile consumer spending avoiding a rate hike but concerns about capacity constraints as the economy recovers likely preventing a rate cut and keeping the risk of a rate hike high.

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Oliver's Insights: Australian home prices up solidly again in November - but expect some slowing in 2026

The key points are:

• Cotality data shows national average home prices rose strongly again in November, but with the pace of growth slowing slightly to 1% mom.

• Near record low vacancy rates is contributing to a pickup in annual rental growth to 5% yoy.

• The lagged impact of rate cuts, the expansion of the 5% low deposit scheme and the startup of the Help to Buy scheme along with the ongoing housing shortage are expected to drive further gains in home prices next year.

• However, the gains are likely to slow in 2026 as a result of poor affordability, the less favourable outlook for interest rates with the risk of a rate hike and APRA moving to ramp up macro prudential controls and likely to do more.

• After around 8.5% growth this year we now expect property price growth to slow to around 5-7% in 2026.

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Oliver's Insights: Share market wobbles – what are the negatives and positives?

The key points for this note are:

• Rich valuations, AI bubble worries and uncertainty about central bank rate cuts are the main negatives for shares at present and could see recent falls extend further.

• Against this though, global profit growth remains strong and there is no sign of recession suggesting that the broad trend in shares may remain up.

• For investors and super fund members, the danger in trying to time corrections and bear markets is that you miss out on longer-term gains. The key is to adopt an appropriate long-term investment strategy and stick to it.

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Oliver's Insights: Investment cycles - what are they & why you need to be aware of them

The key points are:

• Cyclical fluctuations are a key aspect of investment markets. Most are driven by economic developments but get magnified by swings in investor sentiment.

• Of particular importance are the long-term cycles which are often driven by waves of innovation and the 3-5 year business cycle. Lately we have been in the benign phase of the business cycle and may have be entering a weaker and constrained phase of the long-term cycle.

• Periods of poor returns invariably give way to great returns & vice versa. The key is to not get thrown by them.

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Oliver's Insights: Bubble trouble - is AI enthusiasm driving a bubble in shares?

The key points are:

• Rich share market valuations are warning of the risk of a pullback in shares and fears of a bubble and it’s possible that enthusiasm for AI has run ahead of itself. But the fundamentals behind this are arguably far stronger than they were at the time of the late 1990s tech boom.

• For investors and super fund members, the danger in trying to time corrections and bear markets that you miss out on the longer-term gains. The key is to adopt an appropriate long-term investment strategy appropriate and stick to it.

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Oliver's insights: Medium term investment returns face five key constraints

The key points are:

• Five mega trends still point to risks of a more inflation prone/lower growth environment than pre-pandemic.

• These are: a move away from economic rationalist policies; the reversal of globalisation; rising geopolitical tensions; climate change and decarbonisation; as well as slowing and aging populations. A productivity boost from artificial intelligence should provide some offset though.

• But taken together and along with rich share market valuations this will likely constrain medium term superannuation returns, potentially to around 5% pa.

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Oliver's Insights: Gold at record highs - can it keep going? Implications for investors

The key points are:

• The gold price has surged to record highs. Key drivers have been central banks increasing their gold reserves, rate cuts, a renewed downtrend in the $US and demand for a hedge against public debt worries and geopolitical threats.

• While gold is short-term overbought, implying the risk of a short-term correction, more upside is likely over the medium-term as a hedge against a falling $US, public debt and geopolitical worries.

• There is a case for gold in investment portfolios, but its speculative nature suggests only a modest exposure and over the very long-term shares have done better than gold.

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Oliver's Insights: Australian growth on the mend – implications for profits and interest rates

The key points are:

• Australia is seeing a gradual economic recovery with growth likely to reach 2.5% next year.

• This in turn is underpinning a likely upswing in profits.

• The RBA is expected to cut again in November, February and May to 2.85%, although the risk is on the upside.

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Oliver's Insights - Compound interest and returns are an investor's best friend

The key points are:

• Compound interest is an investor’s best friend but can be a borrower’s worst nightmare.

• The higher the return, the earlier and bigger the investment contribution and the longer the period the more it works.

• To make the most of it, ensure an adequate exposure to growth assets, contribute early & often to your investment portfolio and turn down the noise around investing.

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Oliver's Insights: The RBA cuts for the third time – expect a further gradual easing to 2.85%

The key points are:

• The RBA cut its cash rate by 0.25% taking it to 3.6%. This is the third rate cut in this easing cycle.

• The RBA sees inflation running around target but has revised its growth forecasts down again. Its forecasts assume that the cash rate will continue to “follow a gradual easing path”, implying that without further easing, growth and inflation will be lower and unemployment higher than its forecasting.

• We expect the RBA to cut again in November, February and May taking the cash rate to 2.85%.

• The ongoing rate cutting cycle should help underpin a modest further pick up in Australian economic growth to around 1.8% yoy by year end, but with the tariff threat posing some downside risk.

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Oliver's Insights: Poor Australian productivity – why all the fuss? And what to do about it?

The key points are:

• The last decade has seen productivity stagnate in Australia. This has curtailed growth in living standards and real wages.

• Policies to boost productivity include: deregulation; more housing supply; a cap on public spending; and tax reform. 

• Unfortunately, the political pendulum has moved against many of the necessary policies and the lack of a “crisis” like Labor faced in the 1980s may make many reforms difficult.

• But the good news is that the Government now recognises the problem and is starting to focus on how to boost it.

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Oliver's Insights: Seven key charts on the state of the Australian property market

The key points are:

• The Australian housing market remains far more complicated than many portray it to be.

• The Australian housing is cycle is turning up again; falling interest rates are the key driver; along with a chronic undersupply of homes of 200,000-300,000 dwellings; this partly reflects a surge in building times; poor affordability is a key constraint though; but it varies significantly between cities; and finally, mortgage arrears remain low.

• Average prices are expected to rise 5-6% this year boosted by falling rates but constrained by poor affordability.

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