Via AIG: Good numbers but no jobs joy. Jobkeeper roll-off? Full report.
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Catch-up growth pops services PMI but no jobs joy
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Morrison Government vaccine rollout all but collapses
God, what a schmozzle. After PM Morrison yesterday reassured Australians that there was no reason to suspend the Astra Zeneca vaccine, the Australian Technical Advisory Group on Immunisation (ATAGI) has come down with recommendations of the complete opposite: 4-6 people per million will suffer thrombosis triggered by the AZ vaccine. ATAGI has recommended that the
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Links 9 April 2021
Global Macro / Markets / Investing: IMF raises world economic growth forecast, says way out of crisis ‘increasingly visible’ – RT Janet Yellen says this week’s IMF and World Bank meetings will be a ‘Bretton Woods’ moment – Fortune Dollar to its lowest level in two weeks as US bond yields fall – Guardian Mag
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Macro Afternoon: 8 April 2021
Prime Minister letting us know that vaccine his government has been lining up for nation should probably not be given to those under 50 Aussie Scholar ASX 200 Gold Hang Seng S&P 500 Brent Crude Nikkei Footsie AstraZeneca vaccine blood clot incidents spark Pfizer recommendation for under
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Property leading indicators finally ease…slightly
CoreLogic produces a handy set of leading indicators for property markets. The first is for mortgages that have been seriously overheating. Normally we see an Autumn peak but this year it has come later and higher. Be aware that the index is only for owner-occupiers but they have driven the price boom to date anyway:
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Property for sale inventory crunched again
SQM Research has released its Stock on Market data for March, which has recorded a heavy 16.7% year-on-year decline in the number of listings, with every market except Melbourne recording falls: The decline in total listings came despite a solid 10.7% year-on-year increase in new listings (i.e. advertised for less than 30 days): According to
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What are the Biden tax proposals?
Goldman has a crack: The Treasury has released a new more detailed description of its corporate tax proposals. They are in line with the outline from the White House last week, but include a few new details related to the treatment of foreign income and the minimum tax on book income. Overall, Treasury estimates the
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The only way is DOWN for commodity prices
I do enjoy a good stink with a commodity supercycle fanboi. Today’s example is Tom Stevenson at Fidelity International who writes under the title “the only way is up for commodity prices” that: Inflation is everywhere and always a fiscal phenomenon. The Biden administration has embarked on a war against inequality and this will be
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Russian war on Ukraine iron ore upside risk?
With a new Biden administration barely cooling its heals in the White House, and distracted by domestic issues such as COVID, is Russia planning a little test of Biden’s strongly anti-Kremlin rhetoric in the near future? The UK Telegraph is musing on it: Russia is massing as many as 25k heavily armed and mechanised troops
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When will the Fed taper?
Markets clearly think it’s coming very fast. Fed fund futures are pricing two cash rate hikes for 2022, let alone tapering of asset purchases, which will have to come first: That is far too aggressive to my mind. US inflation is going to fall away next year as commodities deflate while China slows, even if
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Alas, there are many more housing “can kicks” possible
Domain continues its laudable series bashing the RBA today. It has good sources, especially our favourite, Gareth Aird at CBA, but, alas, I have to disagree with its conclusion that Australia has delivered its last “kick of the can” to house prices: The RBA does care about house prices (mostly true). Financial liberalisation is the
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It’s a global suburban house price boom!
The Economist has released a new report looking at the synchronised house price boom taking place across rich nations. The Economist claims that this boom is unusual in that it is being driven almost uniformly by suburban houses rather than the inner cities: Across the 25 countries tracked by The Economist, real house prices have
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Australia’s retail boom sputters
Via Westpac credit card tracker: ― The Westpac Card Tracker Index fell 4.1pts to 98.8 over the week ended Apr 4 – the first sub-100 national read in just over six months. While this adds to accumulating evidence of a moderation in consumer demand, the latest figures should be treated with extra caution due to
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Morrison Government orders safety review of its only vaccine
Thanks to Morrison Government procurement policy, Australia finds itself overly reliant upon the Astra Zeneca vaccine which has had both supply and health issues. Now, after the UK banned the use of the Astra Zeneca vaccine for under-30s, Australia’s entire vaccine strategy is at risk. At News: The Australian Technical Advisory Group on Immunisation (ATAGI)
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New car sales are rebounding hard and fast
The Federal Chamber of Automotive Industries (FCAI) has released new car sales results for March, which continue to rebound hard from their October 2020 low. Just over 100,000 new cars were sold in Australia in March, up 22.4% on March 2020 and the strongest March result since 2018. This growth was driven by sales of
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It’s offical: Australia sets course for China divorce
Precisely as forecast at MB, China’s trade war on Australia is really upon itself. Commodities are fungible and will always be shipped no matter what China does. It can preference its suppliers but cannot withdraw its demand from global markets so we will fill the supply gaps created by it shifting procurement elsewhere. New charts
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Daily iron ore price update (booming output)
The ferrous complex was mixed overnight as spot climbed and paper fell. Steel has not updated. Chinese steel output via CISA remains very strong for late March: With steel prices so high it will be very difficult to prevent mills from keeping steel output high. This is bullish for iron ore at the margin. Nonetheless,
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Australian dollar bashed by Morrison Government blundering
Last night the Australian dollar was bashed lower again as the US dollar bull market case firms up. More and more analysts have swung behind the MB view that DXY is up and away as US growth exceptionalism returns. To the charts: The Australian dollar was bashed back to the 75s: AUD was so weak
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Morrison: I don’t hold the syringe, mate
More lies and drivel from Prime Minister Morrison yesterday. As usual, he doesn’t hold the hose, mate. Even when he does: “I want to stress that at no time yesterday did I make any comment about the actions of the European Union, nor did I indicate any of the background reasons for the lack of
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Why paying workers higher wages improves productivity
For years we have questioned Australian businesses’ extreme reliance on cheap, exploitable migrant workers, explaining that it has contributed to the nation’s chronically low wage growth, in addition to stifling our productivity by discouraging firms from adopting labour-saving technologies and automation. Without easy access to low-paid migrants, firms would be forced to lift wages to
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Links 8 April 2021
Global Macro / Markets / Investing: Collect Taxes More Effectively to Avoid ‘Debt Trap’ Chaos, Warns IMF – More Effective Please, no more questions about how we are going to pay off the COVID debt – The Conversation IMF upgrades forecast for 2021 global growth to a record 6% – AP News Sanctions are destroying
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MB Fund Empower Podcast: Chatting Super (Inaugural episode)
In the inaugural episode of our MB Fund Empower Podcast, MB Fund’s Head of Operations Shelley George is joined by our Head of Advice Tim Fuller to talk about all things Superannuation Empowering you to develop money and investing as tools for living your fullest life. Can’t make it to the live series? Catch up
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Morrison caught in web of vaccine lies
Courtesy of Bernard Keane at Crikey: Scott Morrison’s story on why the vaccine rollout is a disaster keeps changing. And it has nothing to do with 3.1 million vaccines doses held up by Europe (a claim the EU denies, in any event). Yesterday, when asked why the government was so badly adrift of its initial
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Which model of financial adviser fees is right for me?
The question of financial adviser fees and the method charged has long been deliberated over, both internally in the industry, and from a client perspective. Like many professional services, the immediate ‘return on investment’ from financial advice can be challenging to quantify and validate. But having a good understanding of how you are charged can
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Eslake: Mass immigration collapse to drive wages growth
God bless COVID-19. After years of battling a kind of corporate wokism that was designed to destroy Australian wages via immigration (cheered on by an idiot fake left) the reality of life without mass immigration is forcing everybody to shift. Saul Eslake was certainly far from the worst on these topics over the years, mostly
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Perfect storm threatens Pilbara iron ore
Via the BOM comes a possible short terms spike in the iron ore price as two cyclones threaten to combine into a perfect storm: Two tropical cyclones are interacting to potentially create a superstorm. At this stage neither is forecast to make landfall in the Pilbara but heavy weather is forecast. Here’s the forecast path:
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Household mortgage stress still very high
Courtesy of Martin North: The latest results from our household surveys confirms that there are more households in financial stress than before the pandemic hit. As the various Government support mechanisms are ratcheted back, we will see the true impact on the community. Household debt is also turning higher again. We have 41.1% of mortgaged
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Labor to roll out community batteries
Readers will know that the MB view of the uptake of battery power to supplant traditional baseload output reliant on fossil fuels is inevitable. Now, Labor has seen the light with an actual policy from Albo today: Labor will spend $200m on community batteries. Each is about the size of a four-wheel drive. They will be
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When will rising yields crash stocks?
If you ask Goldman Sachs then rising yields will never hurt equities. If you ask BofA then it is soon. If you ask me then it’s neither as inflation peters out first. The excellent Matt King at Citi now adds his two-bob’s worth: Consensus explains the yield backup in terms of rising nominal growth and
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US travel continues resurgence
This is what happens when you have a competent government. Vaccines unleash pent-up demand. The US is entering a rude travel boom. Mobility is surging: Credit card spending on travel is surging: Boosted by stimulus: TSA numbers are climbing fast: My base case is that US travel overshoots this year and next as family, recreational