economy

RUSSIA INVADES, SANCTIONS TO FOLLOW

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

MARKETS

Local and global equity markets weakened this week as escalating European tensions saw Russian troops enter Ukraine.

In local stock news, Magellan reported a net profit after tax of $251.6 million for the 1st half, an increase of 24% on the prior period, whilst the company declared an interim dividend of $1.10 per share, up from 97c. The fund manager is considering an on-market share buy-back.

AGL Energy has rejected a surprise $3.54 billion takeover approach from billionaire Mike Cannon-Brookes (Atlassian) and Canada’s Brookfield Asset Management in favour of a plan to split in two this year. A tech guy running an energy company……what could go wrong……

QBE Insurance reported a net profit of US$750 million for calendar 2021, compared with a US$1.5 billion loss in the previous year. Investors were unconvinced by the result.

Super Retail Group had first-half profit fall 35% and warned higher freight and transport costs will continue to affect margins, with lockdowns and higher costs contributing to the weaker result.

Telstra and TPG will share their regional networks in what they claim will provide better service to people outside of major cities. The two companies revealed a 10 year network deal which will improve coverage without the need for costly network rollouts.

Coles reported a better than expected performance for the 1st half of its financial year but rising costs from covid wiped gains from improved sales. Woolworths reported lower 1st half profit due to virus-related costs with the company warning that it’s inevitable food prices will rise.

Seven Group improved 1st half earnings and is banking on its large stake in Boral to deliver better full year numbers. The company posted a 21% increase in net profit, which doesn’t include the 69% stake acquired in Boral.

Rio Tinto reported an improved full year profit of US$21.09 billion and announced a special dividend of US62 cents per share, which will be paid in addition to the final dividend of US$4.17 per share.

Scentre Group returned to full year profit benefiting from an uptick in property valuations. Net profit after tax was $887.9 million, with revaluation gains of $81 million. Investors will receive a higher distribution.

Oil prices surged above US$100 a barrel for the first time since 2014 following Russia’s invasion of the Ukraine before settling back down to trading levels earlier in the week on news that the US is considering a potential release from its strategic oil reserves in coordination with allies.

The Australian dollar fell this week as is normally the case when global risks rise, investors seeking out safety in the Japanese Yen, Swiss Franc, and US dollar.

ECONOMIC

CBA lending data for January showed that growth in new lending for housing eased, primarily driven by owner-occupiers, whilst higher fixed borrowing rates saw a decline in the share of fixed rate lending. Consumer lending growth softened whilst business lending growth remains solid.

A key Australian consumer confidence index fell 1.4% despite the easing of virus restrictions and re-opening of international borders, with concerns regarding inflation hitting home for consumers. The drop in confidence means household spending might be weaker in the period ahead.

Australian construction data showed that building work done fell by 1.7% in the 4th quarter because of a 3.7% fall in private sector residential work. Work completed on renovations also eased in the quarter but remains at a high level. Engineering work completed lifted driven by stronger public sector activity.

Australian wages rose by 0.7% in the 4th quarter, with the annual rate stepping up to 2.3%. Both private and public sector wages grew at the same pace in the quarter. Including bonuses, the annual rate lifted to 2.8%, but remains below headline inflation numbers. The labour market has tightened again over the last few months.

The volume of capital expenditure in Australia rose by 1.1% in the 4th quarter, with mining investment increasing by 2.6% and non-mining investment increasing by 0.5%.

A private US data firm said its manufacturing data rose to a 2-month high in February, suggesting the US economy regained momentum.

Prices charged for goods and services in the Euro area jumped by a record amount in February as an easing of pandemic restrictions led to a strong rebound in economic activity.

China’s central bank has kept its benchmark lending rates unchanged in February, in line with market expectations, after cutting rates a month earlier.

Hong Kong will boost support for consumers and the unemployed by allocating more than US$6 billion as a covid outbreak dents the economy. The government has banned travel from several countries, closed schools, and imposed a range of other restrictions.

POLTICS

Russia invaded Ukraine after 2 regions close to the Ukraine/Russia border declared themselves autonomous or independent, thus seeking support from Russia whist on Ukrainian land. Not a smart move from the Russians as sanctions could become crippling, but equally damaging for the West in terms of embarrassment and the sanctions that will now follow which will add further pressure to current high oil and gas prices and broader inflation. Sanctions could also force the US to reluctantly enter into a nuclear deal with Iran to ease oil supply concerns. China said it opposes the sanctions and called US actions “immoral”.

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

General Advice Warning

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. Before making any decision, it is important for you to consider these matters and to seek appropriate legal, tax, and other professional advice.

Disclaimer

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US inflation highest in 40 years

MARKETS

Equity investors outside of the US seemed to take the highest US inflation in 40 years in their stride, helped by strong returns earlier in the week.

A generally positive US earnings season has helped support stocks. With results in from about 60% of the largest 500 companies, analysts expect profits rose 30% in the 4th quarter from a year earlier. This is up from estimates for 21% growth at the end of September.

In local stock news, Magellan Financial Group shares fell again as Hamish Douglass announced he would step down as chairman and take a medical leave of absence. He will be replaced by REA Group chairman Hamish McLennan whilst investment management duties will fall to Chris Mackay and Nikki Thomas, who have re-joined, and other senior portfolio managers within the business.

Macquarie reported a record 3rd quarter, helped by its markets-facing businesses, with Macquarie Capital earnings helping offset a decline in the annuities divisions such as banking and financial services.

Suncorp posted a near 21% fall in 1st half net profit after more insurance claims from natural disasters. But the company said its underlying business is strong, putting it in a good position in the 2nd half of this financial year.

Commonwealth Bank has reported a 30% growth in cash profits for the 1st half of the financial year increasing their interim dividend by 17%. The bank reported a 12.2% increase in household deposits and an 8.5% jump in home lending. Capital position remained strong. The company plans to buy-back up to $2 billion of its shares on-market, following the $6 billion off-market buy-back in the 1st half.

Computershare upgraded its full-year earnings forecast after 1st half figures beat expectations, with higher sales and profits from its register maintenance business.

As the oil price remains high, the number of US oil rigs rose very modestly to 497, its highest since April 2020. Even though the rig count has climbed for a record 17 months in a row, the weekly increases have been very modest, and production remains far from pre-pandemic highs.

ECONOMIC

Australian consumer sentiment fell again in February, only just remaining in positive territory. Rising inflationary pressures and increasing expectations of higher mortgage rates are negatively impacting sentiment. Changes in business conditions and confidence were mixed in January.

The annual inflation rate in the US accelerated to 7.5% in January, the highest since February 1982, and above market forecasts of 7.3%, as soring emerging costs, labour shortages, and supply disruptions couple with strong demand weighed. Excluding volatile energy and food categories, inflation rose 6%, the most since August 1982.

Private businesses in the US unexpectedly cut 301,000 workers in January, the first job loss since December of 2020 and the biggest since April 2020. Investors were expecting a job gain of 207,000.

The US economy unexpectedly added 476,000 payrolls in January, much better than market forecasts of 150,000, and in stark contrast to the job losses reported in the private sector ADP.

Two key US labour market metrics may take multiple years to recover to their pre-pandemic growth trend, with the labour-force participation rate and the employment-to-population ratio languishing due to high level of retirements and others leaving the workforce altogether.

A noted European central bank hawk said he expects an interest rate increase as early as in the 4th quarter of this year, as he expects Euro-area inflation to stay above 4% for much of 2022. A noted US central bank hawk tried to one-up his Euro-counterpart, suggesting a US cash rate of 1% by July.

POLITICAL

The Australian federal government announced a relaxing of border rules which will see us welcome visa holders into the country from February 21. Tourism operators are still haemorrhaging some $4 billion a month compared to pre-pandemic levels. The federal government has maintained they will not seek to boost immigration rates to “make up” for the last 2 years. Smart move leading into an election, but a poor move from an economic perspective.

Federal Treasurer Josh Frydenberg has indicated that its time to close the federal money tap and hand responsibility for the economy back to industry.

Russia reached new long-term supply deals with China as the Kremlin aims to strengthen ties with the Asian nation at a time of souring relations with the West.

US president Biden said the Nord Stream 2 natural gas pipeline between Russia and Germany would be stopped if President Putin orders an invasion of Ukraine. An invasion is highly unlikely.

Europe and the US are accelerating steps to roll back virus restrictions as politicians across both regions are deeming many public-health measures increasingly unnecessary as they come under pressure from a pandemic-weary public.

The US is apparently losing patience with China after the nation failed to meet its purchase commitments under the trade agreement reached during the Trump administration. China had pledged to buy an extra US$200 billion in US agriculture, energy, and manufactured products in the 2 years through the end of 2021. The Biden administration is under increasing pressure to show it’s willing to punish China for not holding up its end of the deal.

33 Chinese entities including electronics, optics, and healthcare/biotech companies, were added to a US “unverified list” that subjects them to tighter export controls.

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

General Advice Warning

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. Before making any decision, it is important for you to consider these matters and to seek appropriate legal, tax, and other professional advice.

Disclaimer

All statements made on this website are made in good faith and we believe they are accurate and reliable. Macarthur Wealth Management does not give any warranty as to the accuracy, reliability or completeness of information that is contained in this website, except in so far as any liability under statute cannot be excluded. Macarthur Wealth Management, its directors, employees and their representatives do not accept any liability for any error or omission on this website or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided on this website is owned by Macarthur Wealth Management. You may not alter or modify this information in any way, including the removal of this copyright notice.

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Equity markets mixed as relief rally soured by US tech sell-off

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

MARKETS

Equity markets were mixed this week as a strong rally earlier in the week was soured by US tech sell-off and more hawkish comments and action from both the European central bank and the Bank of England.

Reported 4th quarter US corporate earnings have continued to come through stronger than expected, with 78% of companies beating analyst estimates and more than 80% having met or beat expectations. Analysts are expecting that profits from companies in the S&P 500 rose 24% in the quarter from a year earlier.

Money markets are now expecting almost 5 interest rate increases from US Fed this year and 4 from the Bank of England. There’s also speculation that the US Fed might front-load hikes by increasing rates in larger increments, which Fed officials have poured cold water on. All will largely depend on inflation dynamics from here but will also be a function of what interest rate level the economy and markets can absorb and withstand.

In local stock news, Telstra has announced it will spend up to $1.6 billion on two projects over the next 5 years. The spending is projected to provide a $200 million earnings contribution by 2026.

Westpac has reported a net profit of $1.82 billion in the December quarter, up 80% on the quarterly average for the 2nd half of 2021. Cash earnings were up 1%, but the net interest margin declined 8 basis points to 1.91%. Total loans increased 0.7%.

Sydney Airport shareholders have voted for a $23.6 billion takeover bid from a consortium of investors, with shareholders to receive $8.75 per share.

Oil prices moved higher this week after OPEC+ stuck to planned moderate output increases (400,000 barrels per day) despite pressure from customers and consumers to raise output more quickly. The group has blamed rising prices on the failure of consuming nations to ensure adequate investment in fossil fuels, whilst Russia/US tensions also haven’t helped.

The Aussie dollar rose as the US dollar took a tumble after both the European and England central banks turned more hawkish in their rhetoric and actions.

ECONOMIC

The Reserve Bank of Australia left rates unchanged at 0.10% but announced an early finish to their quantitative easing (money printing) program, giving the bank the green light to begin raising rates. The bank made it abundantly clear in their statement that they’re in no rush to raise rates, but markets are currently predicting a rate lift-off in either June or August. Inflation, particularly wage growth, will be key.

Australian private sector credit rose by 0.8% in December to take the annual rate to 7.2%, the strongest rate since November 2008. Both housing and business credit were strong, whilst personal credit fell in December and remains well below levels a year ago.

Australian retail trade fell by 4.4% in December affected by virus issues, falling more than consensus estimates, but remains at near record levels. Food retailing was the only positive, with large falls coming from department stores, clothing & footwear, and household goods.

Australia’s trade surplus narrowed in December as imports rose strongly in the month relative to exports. Exports were mixed, with iron ore rising strongly and reasonable growth from wool and meat, whilst coal fell sharply as did other rural exports. Imports were boosted by strong gains across all the goods categories.

Australian building approvals rose strongly in December, boosted by a surprising lift in multi-unit approvals. In contrast, private detached house approvals fell as momentum continues to slow. Over the past year, the number of approvals is lower by 7.5%, however, alterations & additions approvals remain elevated.

US data showed that the central bank’s preferred measure of inflation rose at 4.9% in December over the prior year, pushing well above the bank’s target.

A separate measure showed US employers spent 4% more on wages and benefits over the past year, an increase not seen since 2001, as a tight labour market encouraged workers to demand higher pay. However, employment costs didn’t rise as much as expected in the 4th quarter easing concerns that wages are advancing too quickly.

US consumer spending fell in December as rising prices and virus fears took their toll.

US manufacturing activity slowed in January, from December, but remained in expansionary territory. Supply chain impediments caused by virus health policies were among the issues that weighed on activity.

The Bank of England voted by a majority 5-4 to increase the cash rate by 0.25% to 0.50%. Members also voted unanimously for the bank to begin to reduce the stock of UK government bond purchases by ceasing to reinvest maturing assets – i.e., reduce the size of their balance sheet by taking the liquidity away they previously provided via money printing. They will also begin to unwind the stock of corporate bond purchases.

The European central bank maintained key interest rates at record low levels in February and pledged to steadily reduce its bond purchases (money printing) this year. Rate rises are unlikely in 2022.

China’s economy continued to slow at the start of the year with manufacturing output slipping and Covid-zero policies curbing consumer spending.

POLICTICS

Russia/US tensions continued to rise this week with Russia maintaining they have no plans to invade and Ukraine trying to calm tensions on all sides. US lawmakers are apparently close to finalising the language for a sanctions bill that could include some penalties even if Putin doesn’t invade. The US has also given the green light to move troops from the US to Europe and to move troops within Europe closer to the Russia/Ukraine border.

Some 300,000 Australian fossil fuel jobs could be wiped out through declining international demand for fossil fuels, new modelling predicts. There’s a widely held belief that those job losses will be easily absorbed, but that doesn’t appear to be apparent with renewable sources of energy largely developed using automation. The job losses will disproportionately impact regional centres. Job transitions and retraining are never easy. 

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

General Advice Warning

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. Before making any decision, it is important for you to consider these matters and to seek appropriate legal, tax, and other professional advice.

Disclaimer

All statements made on this website are made in good faith and we believe they are accurate and reliable. Macarthur Wealth Management does not give any warranty as to the accuracy, reliability or completeness of information that is contained in this website, except in so far as any liability under statute cannot be excluded. Macarthur Wealth Management, its directors, employees and their representatives do not accept any liability for any error or omission on this website or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided on this website is owned by Macarthur Wealth Management. You may not alter or modify this information in any way, including the removal of this copyright notice.

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Markets buoyed by US stimulus bills

Need help? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide. (02) 9683 2869. https://www.macarthurwealth.com.au

Local and global equity markets rose strongly this week buoyed by strong company earnings results, the passage of the US infrastructure bill, and progress on the bigger budgetary bill. 

Analysts now expect 2nd quarter profit growth of 93% for the 500 largest US companies. With their quarterly reporting season almost complete, 87% of companies have beat analyst expectations, which is the highest beat on record. 

In local stock news, general insurer Suncorp improved full-year cash earnings by 42% with shareholders to receive a special dividend, whilst the company will also undertake an on-market stock buyback. 

Toll road operator Transurban revealed that the costs of the West Gate tunnel project in Melbourne have blown out by about $3.3 billion. The company reported statutory profit of $3.27 billion. Lockdowns in Sydney, Brisbane, and Melbourne have reduced the number of cars on the road and have weighed on revenue. 

Commonwealth Bank of Australia released its 2021 financial year results reporting a $1.4 billion increase in cash profit to $8.7 billion over the last 12 months, an almost 20% increase. The bank also announced a $6 billion off-market stock buy-back. 

The gold price had fallen sharply over the last week and half before mounting somewhat of a recovery in the last few days. A stronger US dollar along with the continuing economic recovery and expectations of the US central bank paring back its stimulus program have all put downward pressure on the gold price of late. 

The iron price has continued to fall from its lofty heights following a report which said that China wants to limit steel makers’ impact on its environment, which made investors reassess their expectations for iron ore demand. 
The Reserve Bank of Australia has revised its economic growth forecast down to 4% for 2021 but has kept their forecast for unemployment at 5% for the same period. They did revise their unemployment forecast for 2022 down to 4.25% and left their inflation forecasts unchanged at 1.75% for 2022 and 2.25% for 2023. 

The negative impact of lockdowns have begun to rear their ugly head, putting aside the societal issues, as more than 15,000 home and business owners were unable to repay their loans in July. In addition, an additional 150,000 Australians became unemployed last month according to Roy Morgan. Their latest data showed the bulk of the job losses came from part-time work whilst 61,000 full-time workers also became unemployed. 619,000 workers are now looking for full-time work whilst 803,000 are looking for part-time work. 

July saw the National Australia Bank business confidence index and business conditions fall sharply, which isn’t surprising given the size and extent of lockdowns in a number of states. Australian consumer sentiment fell by more than 4% in August as consumers’ fears of unemployment rose sharply. 

US consumer prices for July rose at its slowest pace in the past 5 months as some price increases have subsided on the back of softening demand and increased supply. Even so, the July inflation number of 0.5% is still quite high, with the annual rate at 5.4%, as demand pressures and supply issues remain. 

US nonfarm payrolls increased by 943,000 jobs last month a Labor Department report showed. Economists had forecast payrolls would increase by 870,000. The report also showed strong wage gains as employers competed for scarce workers as many workers remain at home collecting overly generous unemployment benefits. The unemployment rate also dropped to a 16 month low. 

The US central bank had contrasting rhetoric from a couple of members this week with one suggesting that the US should be well past the pandemic crisis before the central bank raises rates. Another member said high inflation this year may have already met one of the bank’s benchmarks for raising rates. 

The Germans have again warned that inflation in the Euro area could pick up faster than expected and urged the European central bank not to drag out their emergency bond-buying program.   

A gauge of investor expectations for the German economy plunged to 40 from 63 points in July as fears about the impact of the delta variant gather pace. 

Chinese economic data showed exports rising by 19% in July on the same time last year, coming in just under expectations, whilst imports were up 28% on the same time last year, also coming in below expectations. 

China’s central bank has fanned expectations of further monetary policy easing, saying in its latest quarterly report that inflation pressures are controllable whilst highlighting risks to the economic growth outlook. 
The US Senate voted to progress the US$1 trillion infrastructure bill with 19 Republicans voting with Democrats to support the push. However, the Democrat leader of the House has said she will only bring the bill to a vote after the Senate passes a separate US$3.5 trillion bill which has all kinds of things in it, most of it Democrat election promises, which the Democrats will likely look to push through via a process called reconciliation (ie. without Republican support). The debt ceiling (currently at US$28.5 trillion….) with partisanship likely to make it a tough task. 

The Biden administration faced some hard truths this week as it pertains to foreign policy. A return to the Iran nuclear deal looks to be dead in the water as Iran races towards the capacity to build a nuclear bomb in light of perceived US weakness. The US will now be sending troops back into Afghanistan following an ill-advised move earlier in the year to remove US troops from the country. The country has again become a hotbed for terrorism with the Taliban carry out deadly attacks against US allies left behind. Lastly, US energy self-sufficiency is very much a thing of the past after US oil inventories got so low that President Biden had to ask OPEC+ to increase supply. US inventories are low due to increase in demand, but mainly due to government policy banning new investment in oil & gas and pipelines.  

Need advice? Contact Macarthur Wealth Management for expert financial advice in Parramatta and Sydney wide on (02) 9683 2869. www.macarthurwealth.com.au

General Advice Warning

The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this website you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. Before making any decision, it is important for you to consider these matters and to seek appropriate legal, tax, and other professional advice.

Disclaimer

All statements made on this website are made in good faith and we believe they are accurate and reliable. Macarthur Wealth Management does not give any warranty as to the accuracy, reliability or completeness of information that is contained in this website, except in so far as any liability under statute cannot be excluded. Macarthur Wealth Management, its directors, employees and their representatives do not accept any liability for any error or omission on this website or for any resulting loss or damage suffered by the recipient or any other person. Unless otherwise specified, copyright of information provided on this website is owned by Macarthur Wealth Management. You may not alter or modify this information in any way, including the removal of this copyright notice.

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Equity markets fall on virus variant concerns

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Equity markets locally and globally fell this week on concerns regarding rising virus cases

In local stock news, Sydney Airport’s shares rose strongly after they received a $22.3 billion takeover offer equating to $8.25 per share from a consortium of infrastructure investors mostly made up of Australian industry super funds. The offer will be hard for the company’s board to rebuff, but markets aren’t so sure given the stock price remains well south of the offer price. 

Tabcorp will spin-off its lotteries and Keno arm as a separate ASX listed business but has chosen not to sell its wagering and media arm despite several suitors offering to pay about $3.5 billion. 

Seven Group has continued to lift their stake in Boral buying 60 million shares at $7.40 each with the company now owning almost 41% of Boral. 

The upward trend in oil prices reversed course this week on expectations that some countries may break ranks from OPEC+ production targets. The moves come after the United Arab Emirates blocked an OPEC+ deal that cartel leaders Russia and Saudi Arabia had hashed out to increase output. The Saudis and Emiratis have historically had each other’s backs. Demand is likely to remain high as the global recovery continues, whilst US supply runs low due to President Biden’s green policy. 

The Aussie dollar fell into the 74c range against the US dollar as investors sought out safe-haven currencies in light of rising Covid cases and weaker Chinese inflation data. 
The Reserve Bank of Australia held the cash rate at the record low of 0.1% as expected at their July meeting. The board also made 2 other policy announcements relating to their bond yield targeting program (ie. keeping government bond yields very low) and their bond buying program (ie. money printing) which will see them taper bond purchases from $5 to $4 billion per week until at least mid-November. They also changed their language slightly to indicate they don’t expect to lift rates until 2024 (previously “2024 at the earliest”). 

New lending for Australian housing rose by 4.9% in May with a particularly large lift in investor lending in the month which was up 13%. Owner-occupier lending rose by 1.9% whilst lending to first home buyers continues to flatten out. New lending was strongest in NSW and VIC. 

New personal lending rose by a very strong 11% in May, which continues the recent trend higher. Commonwealth Bank’s internal data shows lending for cars and household goods are trending higher whilst lending for holidays remains very soft.
 
The number of Australian residential building approvals posted a large 7.1% fall in May, likely impacted by the ending of the government’s Homebuilder grant scheme. VIC and TAS actually posted increases. Approvals for renovations remain elevated, whilst non-residential building approvals have lifted in recent months.

Australian retail trade rose by 0.4% in May, which was an upgrade on the preliminary estimate. Retail trade continues to run at an elevated level with all major categories running above pre-Covid levels. Spending on food and eating out drove the increase in May. 
 
The US Labor Department’s employment report showed non-farm payrolls increased by 850,000 jobs last month, but the total remains 6.8 million below its peak in February 2020, as the federal government’s over-generous and over-extended Covid unemployment program pays people to stay home until September causing massive labour shortages. The better than expected monthly number comes as some Republican states have started to remove/decline the federal unemployment programs ahead of time thus forcing people back to work. 

European central bank policy makers have revamped their inflation target for the 1st time in almost 2 decades giving itself more room to keep monetary policy loose. The move gives the bank room to overshoot the target if needed, which means they can ply even more stimulus for much longer. 
A deal on an international corporate tax system of sorts came a step closer as 130 countries and jurisdictions backed a plan that includes a minimum corporate rate and tax-sharing on multinational firms’ profits. However, 3 European Union countries have resisted the plan given they currently have corporate tax rates less than the minimum being proposed. 

On the virus and vaccine front, the NSW lockdown was extended by a week impacting children’s first week back at school. The low percentage of people vaccinated seems to be the main focus of those in charge given their ill-guided elimination strategy, in contrast to the more critical areas of ICU bed availability (plenty) and deaths (very low relative to a normal winter flu season). In other parts of the world, concerns continued regarding the Delta variant, which data shows is more contagious, is significantly less deadly than the original strain, and vaccines are more than effective. The US continues to reopen, the UK is nearing the date when all restrictions will be removed, whilst Japan declared another state of emergency as it tries to ready itself for the Olympics. 

Chinese authorities are planning rules changes which would allow them to block companies from listing overseas, closing a two decade loophole which has allowed Chinese tech giants to attract foreign capital. The move continues Beijing’s tightening of controls over the country’s largest tech companies. 

Former US President Trump announced that he will sue Twitter, Facebook, and Alphabet as well as their CEOs in a class action lawsuit for blocking him out of their social media platforms. Trump is banned from Twitter for life and Facebook for at least 2 years, pending another review. The case will likely be decided by the US Supreme Court with both sides effectively using the same argument that it’s their 1st amendment right to not be censored (in Trump’s case) and to censor (in the social media company’s case given they’re private companies).  

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