Traders welcome return of volatility

A sharp pull-back in US equity markets, sparked by chatter US President Donald Trump might face impeachment proceedings, didn’t alarm professional investors and analysts who said a correction of this sort had been long overdue.
Nanjing Night Net

Wall Street’s S&P500 shed 1.8 per cent on Wednesday, sparking an 0.8 per cent sell-off on the ASX.

Fast-moving developments kept US political issues front-of-mind during the session, with news emerging over the morning that the US Justice Department had appointed former FBI director Robert Mueller as special counsel to investigate possible collusion between Mr Trump’s 2016 campaign team and Russia.

But professional traders saw a silver lining, welcoming the up-tick in market volatility, which had been eerily low of late.

Last week, the Vix index – the so-called “fear gauge” for Wall Street that tracked implied volatility through options pricing in the S&P500 – traded near its lowest level for 25 years. Periods of low sharemarket volatility tended to concern professional traders, who worried a sense of complacency was infecting markets, leaving them overvalued and poorly equipped to deal with shocks.

With market volatility at historic lows, US investors had been “sleepwalking” into the sell off, ANZ analysts said on Thursday morning. The 1.8 per cent Wall Street drop – the largest in eight months – caused the Vix index to jump a huge 46 per cent.

“[Low volatility] can really lure investors into a false sense of security, thinking that all the risk is dissipated and it’s blue skies ahead,” said Perpetual’s head of multi-asset investment strategy Matt Sherwood.

“Low volatility can itself become a high-risk environment, because people can start overpaying for assets. This is a healthy reminder that, even in a growing climate, risk needs to be managed in portfolios, not only in terms of asset allocations but also stock selection, regional exposures, balance sheets and so on.

“Markets with low implied volatility are usually the best time to put protection on. When markets are rising, sometimes people say you don’t need it. They forget markets don’t always go up in a straight line.”

The fall reversed some of the gains made through several days of record closes on Wall Street, and so could be seen as a necessarily pull-back, Citi director of equities sales Karen Jorritsma said.

“If you look at what our US desk is saying, there’s no sense of panic coming out of them at this stage,” she said. “And globally, some of our clients are seeking value and coming back in, to add reflation exposure cheaply given the pull-back.

“It’s an opportunity to step back into a market that’s been overheated. Overall, the guys here are pretty relaxed. It’s too early to say if this’ll last.”

Mr Sherwood expected the sell-off to be short-lived, provided nothing emerged that improved the odds of an impeachment.

“The key for markets is the longevity of the crisis and how much serious political water President Trump takes on board,” he said. “The market downturn should be short term unless indictable evidence arises.

“If it does, the tax reform agenda will be out, the infrastructure spending agenda will be out and the regulation reducing growth agenda will go also. It will mean Washington’s sole focus will be on whether to impeach the President rather than focusing on growth-friendly reforms that markets can rally behind.”

BT Investment Management’s head of fixed interest Vimal Gor said: “The markets are continuing to question, with more urgency, the effectiveness of [Mr] Trump in getting through his manifesto items.”

Reflecting this heightened uncertainty, investors piled back into bonds, as yields on US Treasuries, which move inversely to the price, dropping as low 2.21 per cent overnight. Mr Gor labelled it “a material move”.

Meanwhile, futures contracts showed the market pricing on the odds of a US Fed interest rate hike had trended lower over the day, from 70 per cent to 60 per cent, highlighting the greater economic uncertainty. The US dollar index, which measured the US currency against those of its 10 largest trading partners, fell 0.8 per cent on Wednesday before recovering slightly by early Thursday. The Australian dollar rose in response.

This may impact local companies that earn in US dollars. Such companies have had a good run of late, but may be punished as investors reduce their US exposures off the back of the US dollar declines.

But the broader impact on locally listed companies at this stage looks limited.

“I think for us the situation in North Korea is also front of mind,” Ms Jorritsma said. “It’s never great for the ASX to see a Wall Street pull-back, but there are other issues for us as well.”

While remaining broadly comfortable with the sell-off, several investors pondered if the political headwinds caused by the US President could overwhelm the positive reflation trade his election unleashed.

“We’re four months into a four-year term,” Mr Sherwood said. “Normally at this time it’s a political honeymoon, approvals are sky high and things are getting done. But with [Mr] Trump there’s already mounting political risk. So it tells you the next three years and eight months are not going to be quiet.”

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

To Bach and beyond with sublime Ms Hewitt

MAGNIFICENT: Angela Hewitt gave a impressive performance at the Newcastle Conservatorium of Music on Thursday night as part of Musica Viva’s 2017 International Concert Series.I arrived at Canadian pianist Angela Hewitt’s Musica Viva performance at the Newcastle Conservatorium of Music on Thursday night expecting Bach.
Nanjing Night Net

She is, after all, synonymous with the German composer through extensive, celebrated recordings and is halfway through a global Odyssey to play every piece of Bach keyboard music ever composed. Which is a lot.

She has been playing Bach since she was 3 or 4, and hearing it before that.

Her father was the organist and choirmaster at Ottowa’s Christ Church Cathedral, and a traveling soloist known for his Bach.

Her mother was a piano teacher who reinforced in her the significance of the German composer, and so Ms Hewitt is quite literally forged in Bach.

In the first section of Program 1on Thursday night, as she played the First and Fourth Partitas, it was as if time stood still as she exhibited mastery of works that have been imbued in her since childhood.

Cascading, mellifluous, brilliant.

The variations kept coming after the break in Scarlati’s Sonatas in D and B major, and the thought did cross my mind that “here we go again’’, but as we moved into Scarlati’s E and A major Sonatas there was a definite shift in the style and tempo.

The “build” crescendoed with performance fireworks in Ravel’s Sonatine and Chabrier’s Bourree fantasque –two beautifully complex works performed with trademark assuredness and clarityby Ms Hewitt, all from memory.

Profoundly impressive.

It made me wonder how she keeps a lid on the lightning during those quieter, but no less complex,Bach pieces.

As she said in a talk after the show, Bach is the perfect vehicle for any pianist to warm up with, and in the grand tradition of that deeply religious composer, I suppose it’sall about keeping the faith.

The audience response at the conclusion of the Chabrier piece was immediate and rapturous.

Debussy’sClairde lune loomed almost a cliche when announced as the encore, but in Ms Hewitt’s hands it proved the perfect nightcap to an intoxicating evening of virtuosity.

Further to thegenerous and engaging chat after the show, Ms Hewitt expanded on how she deals with performance nerves and memorising difficult works, two issues she clearly has notrouble with.

(Hard work and preparation are the key, if you were wondering.)

This is Ms Hewitt’s second national recital tour for Musica Viva. She has further shows at Melbourne (May 20), Perth (May 23), Adelaide (May 25) and Sydney (May 27).

Fifita-inspired Sharks mount comeback to down Cowboys

Sharks 18 Cowboys 14
Nanjing Night Net

An Andrew Fifita-inspired Sharks woke from a first-half slumber to end a baffling run of home defeats, reeling in a 14-point deficit to down a Johnathan Thurston-less Cowboys on Thursday night.

Staring down the barrell of a fourth loss from just five matches at Southern Cross Group Stadium this season – their only win in the Shire previously in 2017 was a one-point nailbiter over wooden spoon fancies Newcastle – Shane Flanagan’s premiers mounted a second-half surge to win 18-14.

Fifita all but carved his name in stone for Laurie Daley’s NSW side for the State of Origin opener, tormenting a tiring Cowboys and setting up a crucial second-half try for Chad Townsend.

A flat Cronulla were forced to do it the hard way though, trailing 14-0 at the break before struggling halves James Maloney – a certainty to line up alongside Fifita at Suncorp Stadium – and Townsend unshackled an often pedestrian Sharks attack.

Fifita’s fixture as a part of Daley’s front-row rotation was never in doubt with another barnstorming display – and he needed time to find some support acts as the Sharks overcame another error-strewn display.

But like they have on so many occasions previously they found a way to win when far from their best.

Flanagan is likely to lose Fifita, Maloney, Wade Graham, Jack Bird and possibly Valentine Holmes to State of Origin selection and has to face the Bulldogs and Tigers without them during the representative period. And he somehow has to figure out how to win more consistently at a ground which once used to be a fortress.

Unbeaten on the road and trailing only fellow grand finalists Melbourne on the ladder, the Sharks wore down a brave Cowboys who rode Michael Morgan’s first-half masterclass to the brink of another upset.

Given the history between the sides – they had met in three of the last four finals series – it should have been no surprise there were a few twists and turns late in this one.

Sosaia Feki had a forgettable first half, but scrambled over for the matchwinner with less than 15 minutes left to keep the Sharks firmly entrenched inside the top four.

Despite training with the squad on Wednesday, Thurston’s absence from the team list means it will be almost two months by the time he pulls on a Cowboys jumper again. But it would be a brave man to suggest he won’t don the Queensland maroon in a fortnight’s time.

Morgan, the reluctant conductor, was again peerless for the second Thursday night in a row against a Sydney powerhouse expected to handle a Thurston-less Cowboys who again played above their weight.

While it was a first 40 minutes to remember for Morgan, it was 40 to forget for Feki. He bobbled an inch-perfect James Maloney kick when it appeared easier to score than not, crabbed too far infield as Kyle Feldt set up Ben Hampton for the second try and then was outleapt by his opposite number for the third.

Prior to that Feldt’s wing partner Antonio Winterstein was aided by a crisp pass from Morgan – who also booted the most improbable grass-cutting 40-20 – to open the scoring.

While in general play the Cowboys barely missed a beat without Thurston, they can’t welcome his right boot back fast enough after Ethan Lowe forfeited goalkicking responsibility with a comedic shot at penalty goal from almost next to the posts.

Feldt duly stepped in at the next chance and it was only Maloney’s perfect goalkicking which split the sides.

It was only fitting Morgan’s frustrated opposite Maloney would throw the Sharks a lifeline early in the second half when he danced over from close range, the hosts’ at time impotent attack finally finding a crack in the Cowboys wall.

And it was Maloney’s halves partner Chad Townsend, himself enduring a difficult night, who dragged the Sharks within two points after Fifita pierced the line and popped a one-handed offload to the waiting No.7. Then the ultimate redemption.

Tormented in the first half, Feki tiptoed down the sideline to avoid the grasp of Feldt to put the Sharks in front for good.

Cronulla Sharks 18 (Maloney, Townsend, Feki tries; Maloney 3 goals) def North Queensland Cowboys 14 (Winterstein, Hampton, Feldt tries; Feldt goal) at Southern Cross Group Stadium. Referees: Ashley Klein, Alan Shortall. Crowd: 8557.

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

Kids and their fathers agree: Dad’s working too much

A new study from the Australian National University has found a third of Australian children believe their dads work too much.
Nanjing Night Net

The research showed children aged between 11 and 13 years said their fathers worked too much, blaming long hours, night work and weekend shifts.

Lead researcher professor Lyndall Strazdins said it was the first study that compared both the child’s and their father’s opinion on dad’s work life balance.

“Fathers and children are agreeing on what the aspects of his job are actually making it hard [to get time together],” Ms Strazdins said.

Mr Strazdins said the culprits were fathers working long hours: either long days at the office or being called to work weekends.

“Fathers had lots of time pressures on them at their job […] that also affected children’s perception of time with their fathers,” Ms Strazdins said.

One in eight kids wished dad didn’t work, while 40 per cent of fathers worked nights or weekends and felt they couldn’t change their work hours.

Ms Strazdins said studies had already shown long hours were detrimental to health and gender quality.

“This is part of a national debate we need to keep having,” she said.

The research showed it wasn’t a problem unique to white collar jobs, affecting workers across the board.

Half of the fathers surveyed worked more than 44 hours per week, one fifth worked over 55 hours per week.

“This actually then makes it difficult for many fathers to be the fathers they want to be,” Ms Strazdins said.

The study also found 55.9 per cent of dads missed family events, with 20.3 per cent feeling pressured during family time.

Dad Geoff Beckett said he was closer to retirement which allowed him to spend more time with his daughter, Gemelu, 2.

“My work’s online so I get a lot of time with her now,” Mr Beckett said.

“But where as with [my] other kids, I never really knew them.”

Mr Beckett’s work as a contractor earlier in his life meant he was working long hours or on weekends, preventing him from spending more time with his other children as they grew up.

“When you’re contracting, you’ve got to take what you can,” Mr Beckett said.

Ms Strazdins said Australian work place cultures around work expectations for men needed to change.

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

Pensioners targeted in $980m ‘robo-debt’ expansion

Older people will be the target of an expanded “robo-debt” collection measure the Department of Human Services has confirmed will raise close to $1 billion.
Nanjing Night Net

Despite the fall-out from the government’s debt collection saga, the DHS will expand the program from July 1 using information from the Tax Office about pensioners’ interest earnings and asset values.

Pension recipients earning interest on term deposits and income from property are expected to shoulder most of the $980 million savings burden the government has projected over the next three years from the expansion of its debt program.

The department will check ATO data against the income and assets clients reported to it to decide whether to pursue debts, DHS officials told senators.

DHS representatives confirmed the $980 million figure at the final hearing of the Senate inquiry into the controversial “robo-debt” program on Thursday, but said that discrepancies in income and assets detected would be manually checked by staff.

Senate committee member and Labor senator Murray Watt said outside the inquiry the government should pause the expansion of its debt collection program.

“No one has been able to convince this inquiry that this system has been running so smoothly that we aren’t going to see a whole bunch of new problems emerge on July 1 with this expansion, with a particularly vulnerable group of Australians being older people,” he said.

Department secretary Kathryn Campbell described the expanded debt collection measures, announced in the mid-year financial outlook in January, as the DHS told the Senate committee it made $70 million more than expected in the first year of the maligned “robo-debt” program.

Amid some pointed exchanges with senators, department officials defended its payment of debt collectors using commission – a practice of payday lenders – and said letters sent to Centrelink clients about income discrepancies were “initial clarification letters”, not debt notices.

When asked the correct term for an “error” in sending a letter, Ms Campbell said: “They’re initial clarification letters where the recipient or former recipient has been able to provide clarification which means there is no need to continue with the process”.

The DHS was sending 10,000 letters a week due to constraints of registered post, down from 20,000 a week earlier in the program.

Referring to ATO data used to compare with DHS records of welfare recipients’ employment in identifying possible debts, officials admitted it was difficult to know when they had been employed in a financial year if the Tax Office didn’t detail specific periods of employment.

The government expects to save $4.5 billion in total from its data-matching program.

The Senate Committee is expected to release its report into the “robo-debt” system in June.

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