Markets are at highest since 1900, so expect some pain

A prolonged bull market across stocks, bonds and credit has left a measure of average valuation at the highest since 1900 – and at some point this is going to translate into pain for investors, warns Goldman Sachs.
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“It has seldom been the case that equities, bonds and credit have been similarly expensive at the same time, only in the Roaring 20s and the Golden 50s,” Goldman Sachs International strategists including Christian Mueller-Glissman wrote in a note this week.

“All good things must come to an end” and “there will be a bear market, eventually” they said.

As central banks cut back their monetary stimulus measures, pushing up the premiums investors demand to hold longer-dated bonds, returns are “likely to be lower across assets” over the medium term, the analysts said.

A second, less likely, scenario would involve “fast pain.” Stock and bond valuations would both get hit, with the mix depending on whether the trigger involved a negative growth shock, or a growth shock alongside an inflation pick-up.

“Elevated valuations increase the risk of draw-downs for the simple reason that there is less buffer to absorb shocks,” the strategists wrote. They said the average valuation percentile across shares, bonds and credit in the US, the world’s biggest financial market, “is 90 per cent, an all-time high.”

A portfolio of 60 per cent S&P 500 Index stocks and 40 per cent 10-year US Treasuries generated a 7.1 per cent inflation-adjusted return since 1985, Goldman calculated — compared with 4.8 per cent over the last century. The tech-bubble implosion and global financial crisis were the two taints to the record.

Low inflation has prevailed in the current period, just as it did alongside economic growth in the 1920s and 1950s, according to the Goldman report.

“The worst outcome for 60/40 portfolios is high and rising inflation, which is when both bonds and equities suffer, even outside recessions.” An increase in interest rates triggered by price pressures “remains a key risk for multi-asset portfolios. Duration risk in bond markets is much higher this cycle,” they wrote.

In the Goldman strategists’ main scenario of lower but positive returns, investors should “stay invested and could even be lured to lever up.” They suggested putting more in shares, with their greater risk-adjusted returns, and scaling back the duration of investments in fixed income.

Other findings in the report include: The exceptionally low volatility found in the stock market — with the volatility index VIX near the record low it reached in September — could continue. History has featured periods when low volatility lasted more than three years. The current one began in mid-2016.Valuations have a “mixed track record” for predicting returns, explaining less than half the variation since 1900.Major draw-downs in 60/40 portfolios over the past century amounted to 26 per cent in real terms on average, lasting 19 months. It took two years to get back to previous peaks, on average.Bonds are probably less good hedges for equities nowadays — a point also made by Pacific Investment Management Co., the world’s largest bond manager.Central banks “might not be able or willing to buffer growth or inflation shocks,” especially if they judge that imbalances and excesses are building. They also face fewer options to ease monetary policy given low rates and big balance sheets.

Bloomberg

This story Administrator ready to work first appeared on Nanjing Night Net.

Shining light on disability

DAZZLING DISPLAY: Leapfrog CEO Bruce Mulligan and Leapfrog Chairperson Liz Nicol join local V8 Supercar driver Aaren Russell at the official opening of the Carrington Grain Silo lights display.The Newcastle Harbour night sky now looks even more spectacular as the Carrington Grain Silos shines iridescent blue and orange, representing equality, harmony, accessibility and diversity in celebration of the upcoming International Day of People with Disability on December 2.
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Local disability services provider Leapfrog Ability and GrainCorp have teamed together again to create the display, in a unanimous show of support for people living with disability.

“There are an enormous number of people and organisations across the Hunter who stand firmly behind the principles of equity and accessibility,” Leapfrog CEO Bruce Mulligan said.

“The Carrington light display is about opening up conversations around how we, as individuals and as a community, can embrace our fellow members living with disability with dignity and respect.”

And there was no better opportunity than last Wednesday night to flick the light switch as Newcastle buzzed with excitement in the lead-up to theV8 Supercars Newcastle 500.

Supercar racing identity and proud Novocastrian Aaren Russell took time out of his hectic pre-race schedule to attend the lighting, bringing further attention to this important Day celebrated internationally as a means to increase public awareness, understanding and acceptance of people with disability, and celebrate the achievements and contributions of people with disability.

Such being the story behind the co-owner of the team Aaren now races for, Lucas Dumbrell Motorsport.

Former racer Lucas Dumbrell remains the youngest team owner in the V8 Supercar Championship Series.

At the tender age of 19, he made history and established the team after an accident in a Formula Ford at Oran Park in late 2008 left him a quadriplegic and stripped him of his lifelong dream of competing in V8 Supercars as a driver. Lucas Dumbrell Motorsport raced two Holdens last weekend.

International Day of People with Disability is December 2. The Carrington Grain Silos can be seen from many vantage points along the Newcastle Harbour and will remain lit until December 7.

Wild weather on the way for the Hunter

Wild weather on the way for the Hunter Friday Morning at Salamander Bay”Wanaka Tree”Photographer: Merakiartvan
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WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

Picture: Lynne Brunner

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

Picture: Lynne BrunnerPicture: Lynne Brunner

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

WEATHER: Sunny days are done for a little while. Picture: Emily Stoddart

Picture: Lynne Brunner

Picture: Lynne Brunner

Picture: Dylan Mitchell

Picture: Dylan Mitchell

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

SMASHED: The clean-up in Kurri Kurri. Picture: Marina Neil

TweetFacebook NOVEMBER: Sunny days and storms Do you have a weather photograph to share? Send to [email protected]南京夜网419论坛Wild wet weather is on the way for the Hunter region.

The storms are forecast to hit on the weekend, with large partsNew South Wales on flood watch.

An unprecedented wet weather system looks to smash through the recent record-breaking heat.

The Bureau of Meteorology (BoM)has forecast unsettled weather which willgenerate widespread rain as it interacts with humid air from the north, with moderate to heavy falls likely.

As the system moves into Victoria and NSW, that predicted rainfall only gets higher.

“The system will ramp up over Victoria and western NSW on Friday and into Saturday with rainfalls of 100-200mm expected in these areas, particularly those areas closer to the ranges,” BoM senior forecaster Scott Williams said.

“Southern parts of NSW and the ACT could see falls in excess of 100mm on Friday and Saturday with some places seeing 200mm.”

The weather will hit the southern parts of the state harder than the Hunter region. Newcastle, Maitland and the valley has a very high (80 per cent) chance of showers on Saturday, most likely in the afternoon and evening when a thunderstorm is expected to roll in.

Winds will freshen gradually ahead of a significant southerly change on Sunday and Monday.

“To get a rainfall event like this at any time of the year of the year is certainly unusual,” James Taylor, a senior meteorologist with the BoM’sextreme weather desk said, adding that spring is the most likely season for such weather.

WATCH: BoM senior meteorologist Adam Morgan explains how the wild weather will come in.

Roo takes out ute’s front seat at Jerrys Plains

IMPACT: The Mitsubishi ute after it crashed with a kangaroo on the Golden Highway at Jerrys Plains. Picture: NSW Police
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A MOTORIST on the Golden Highway at Jerrys Plains is counting their lucky stars after a kangaroo reportedly went through the front window.

Highway patrol officers said it was incredibly fortunate there were no injuries, with the force of the impact so strong the kangaroo snapped the front passenger seat.

It died in the back seat of the Mitsubishi ute, police said.

The crash occurred about 6am.

In other police news, highway patrol has issued more than 1000 fines for mobile phone use as part of a one-day state-wide traffic crackdown.

A further 306 fines were issued for drivers not keeping left, while 561 were issued for defective vehicles.

Traffic and Highway Patrol commander Assistant Commissioner Michael Corboy said police were disappointed with continued mobile phone use behind the wheel.

“Despite the numerous warnings and obvious dangers to drivers and innocent road users, the message not to text and drive is just not getting through,” he said.

“In a single day, officers issued more than 1,000 infringements to people who made the selfish choice to use their phone while driving.

“It is also disturbing to see so many vehicles that are not roadworthy still out on our roads, putting drivers and other innocent road users at risk.

“We have already lost 354 lives on NSW roads this year and the greatest tragedy is that many deaths were avoidable if people took responsibility for their actions and for the maintenance of the vehicles they are driving.”

In August, theNewcastle HeraldreportedHunter motorists forked out nearly $13,000 a week for mobile phone related offences.

At the time, aHeraldroadside survey revealed alarming mobile phone use on Link Road, Jesmond,and the Pacific Highway, at Highfields.

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Worker’s body recovered after Blue Mountains rock slide

The body of a 36-year-old contractor has been recovered and his two colleagues remain in hospital with serious injuries after a rock slide in the Blue Mountains on Wednesday.
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Emergency services started the recovery effort about 9am on Thursday and the body was retrieved about 1.20pm, police said.

One of the man’s colleagues, aged 27, is listed as in a critical condition at Westmead Hospital, while the other, 26, is in a stable condition at St George Hospital with head and back injuries, a police spokeswoman said.

The three National Parks and Wildlife Service contractors were working to improve the safety of the National Pass walking track on Wednesday when they were hit by rocks falling from a height of 10 metres.

Emergency services were called about 11.40am on Wednesday, with critical care paramedics winched in by helicopter to assess the survivors.

Superintendent Darryl Jobson said it took rescue crews about an hour to reach the difficult site.

A crime scene was established on Wednesday night, and the body remained under police guard overnight.

The National Pass walking track has been closed since August 31 “due to an identified risk of unstable sections of rock”.

SafeWork NSW has been notified and a report will be prepared for the coroner.

with Lucy Cormack and Jamie Berry /**/

This story Administrator ready to work first appeared on Nanjing Night Net.