David Llewellyn-Smith


As China contains COVID-19, global pandemic risk rises

Beijing has released its latest virus data: At 04:00 on February 19, 31 provinces (autonomous regions, municipalities) and the Xinjiang Production and Construction Corps reported 394 new confirmed cases and 114 new deaths (108 in Hubei, Hebei, Shanghai, Fujian, Shandong, and Yunnan). And 1 in Shaanxi), and 1277 suspected cases were newly added. 1779 new


Goldman: Equities gunna pop

Via Goldman today comes a statement of the obvious: Despite posting unusually strong returns in 2019, the equity bull market continues; investors have largely shrugged off the potential economic and earnings hit from the coronavirus. The relentless rise in equities is largely a function of lower bond yields and the hope that the current disruption


Aussie unemployment jumps

Via the ABS just now: TREND ESTIMATES Employment increased by 20,000 to 12,996,700 people. Full-time employment increased by 14,600 to 8,879,300 people and part-time employment increased by 5,400 to 4,117,300 people. Unemployment increased by 600 to 709,600 people. Unemployment rate remained steady at 5.2%. Participation rate remained steady at 66.0%. Monthly hours worked in all


Retailpocalypse claims ISHKA

At Nine: Victorian-based homewares retailer ISHKA has become the latest victim of Australia’s deepening retail crisis, collapsing after almost 50 years in business. Specialising in handmade craft, gifts, clothing and homewares, ISHKA operates 60 stores and employs over 450 staff. The retailer said an “unusually challenging summer period” and $3 million worth of Christmas stock


ScoMo to keep border shut as chaos engulfs COVID-19 numbers

Via ZH: Yes, in the sixth edition of its diagnostic criteria released Wednesday for covid-19, the National Health Commission has undone what it did just one week earlier, and has eliminated the distinction between how cases would be classified in Hubei province and other regions. Cases will now be reported under two categories: “suspected cases” and “confirmed


A little life returns to Chinese cities

A very little. The big five remain mostly shut: Similar in other indicators: The Global Times reports on a scene that must be replayed all over China right now: Beijing district official confirmed on Tuesday that one of its government employees has been infected with the novel coronavirus (COVID-19), causing 69 more in quarantine, but


S&P: COVID-19 will hit Australia hard

Via S&P: China’s health emergency will disrupt economic activity throughout Asia-Pacific. S&P Global Ratings anticipates the region’s GDP will expand by 4.3% in 2020, 0.5 percentage points (ppt) lower than our pre-outbreak forecast. Our forecasts are subject to much more uncertainty than normal. We expect significant growth drags of 1 ppt or more in Hong


Coronavirus property panic begins

The coronavirus property panic begins, predictably led by Domain: Melbourne’s rental market is feeling the effects of the coronavirus outbreak, as student apartments sit empty while their potential tenants wait in China for Australia to lift its travel restrictions. There are fears that if Chinese students don’t arrive soon, the apartments may stay empty for


Australian airport traffic craters

No surpise, really, but worth noting: ANZ data show a steep drop in spending in major Australian airports in Feb reflecting #coronavirus travel bans and lower demand for international travel. Steadier spend in smaller airports suggests this is limited to international travel. @Adelaide__T #ausecon @DavidPlank12 pic.twitter.com/eVhCcJ9piT — ANZ_Research (@ANZ_Research) February 19, 2020


Locked down China demands Australia open borders

Via the AFR: Gu Xiaojie, the Chinese Consulate General in Sydney, declined to specify whether he had asked the state ministers – including the NSW deputy premier and ministers for health and education – to lobby Canberra to lift the extended travel ban on flights from China. …”Some people are saying the situation will affect


Coronavirus outbreak in Korea

Via Straits Times: South Korea reported 15 new cases of the coronavirus on Wednesday (Feb 19), bringing the total number of people infected in the country to 46, the Centres for Disease Control and Prevention (KCDC) said in a statement. Of those, 13 were in Daegu and neighbouring North Gyeongsang province, with 11 of them


UBS raises iron ore price outlook

Coronavirus leads to GDP downgrades The outbreak of the coronavirus has forced downward revisions to our GDP forecasts from our (US, China, & Global) economists (2020e GDP growth -20bp to 2.9%). The downgrades have been most severe in 1) China & 2) Q1 2020. While uncertainty over the severity and duration of the outbreak remains,


Tradie squeeze eases

Via the HIA: “Despite the housing market cooling during 2019, demand for skilled trades workers remains strong, with demand in Sydney, Melbourne and Brisbane exceeding availability,” said HIA Economist, Angela Lillicrap. The HIA Trades Report provides a quarterly review of the availability of skilled trades and any demand pressures on trades operating in the residential


Australian leading index falls away

Via Westpac: • The six month annualised growth rate in the Westpac– Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from –0.28% in December to –0.46% in January. The growth rate in the Leading Index remains below zero, indicating momentum


Victoria Balkanises national electricity market

Via Reneweconomy: Victoria has announced a dramatic intervention – and set the stage for an interesting COAG meeting of state energy ministers next month – after announcing a split from national electricity rules in a bid to fast-track urgent grid upgrades and to unlock more large-scale renewables and encourage more big batteries. Victoria energy minister


Fortescue mines money

Here it is. El Dorado: The key, of course, is the realised price. Thanks Vale! At these kinds of prices, FMG is literally printing money. Roughly $7bn of it over the full year delivering a trailing P/E of just 5x. But is it sustainable? At 2019 prices, the profit is slashed in half and the


Gold breaks out. Why?

Here it is: In Aussie dollars it is very shiny: Yet most prominent local miners are lagging badly (with a few notable exceptions) What gives? It’s not entirely clear why gold is rallying given DXY is also on a charge. There are two possible explanations. First, as COVID-19 threatens a pandemic, gold is bid as


Target joins the wage theives

Ahem…or, is confused by complex industrial relations laws: Major retail group Wesfarmers has added to the humiliation of the sector’s “endemic problem” of wage theft, with target staff being ripped off by $9 million. The Perth-based conglomerate admitted to the underpayment this morning when reporting the company’s half-year earnings. “Payroll errors” at Wesfarmers now equates