showed the biggest monthly decline in national house prices since 1983. The pace of monthly declines rose from 0.8 per cent in June to 1.4 per cent in July, with prices now down 2.6 per cent since they peaked in April. Forecasts now call for a peak-to-trough fall of 15 per cent to 25 per cent.
Consumer spending is clearly going to fall in the second half of calendar 2022. What investors in the discretionary retail, gaming, consumer-facing manufacturing, media, travel, retail property, and financial services sector will look for this August is signs the slowdown is already biting, and guidance for what happens next.
“The downside risk to share prices is mostly limited with potential for earnings to continue to positively surprise.”UBS strategist Richard Schellbach points out, June-quarter production reports from the mining sector make it clear rising wages and outright skills shortages remain an issue. How other sectors are faring on the labour front, and whether shortages are weighing on sales as some research has suggested, will be closely watched.
He says balance sheets are generally in strong shape, but warns investors could be surprised by rising debt costs.Could caution around a higher cost of capital and the general outlook even lead companies to be more cautious about dividend payouts?last week, and at the very least it seems unlikely that big dividend increases will be prevalent this reporting season.
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