The biggest story of this week was the surprise 4% inflation rate posted by the Australian Bureau of Statistics (ABS) midweek.
Analysts had been forecasting anywhere between 3.6% and 3.8% – AMP’s chief economist Shane Oliver was betting on the upper range, but all were caught out as rents, electricity and fuel continue driving up CPI.
Markets, not expecting such a result, tanked immediately – with stocks in the real estate sector taking the worst bruising.
On Friday, however, sentiment was reversed by a quarterly US GDP read of 1.4% – a significant slowdown vs 3.4% pcp, suggesting the US economy is slowing down – which could suggest that interest rate cuts happen this year as far as The Fed is concerned.
This feeling is painfully familiar – rapid swings in sentiment overnight based on economic data points – and we are once again all talking about interest rate cuts. When they’ll happen, how many, and how close together. Personally, I can’t wait for interest rate cuts to be over with, so I can start thinking about something else.
There was, luckily, a US Presidential debate to watch at least. The peak highlight was when they started arguing over who was better at golf.
Trump told listeners that migrants were killing American citizens and that he could end the Ukraine Russia war, which is about what you’d expect. Biden, for his part, played the part of moral outrage. Watching the debate, one may feel that you were watching two old friends bickering down at the local RSL. Trump plays up Biden’s age a lot, but the truth is there’s only a four year age gap between them.
Surprisingly, or maybe not so surprising, the cost of living didn’t come up that much from either party. Inflation was mentioned, but not as much as I was expecting. Taxes, however, were. In my view, the debate was actually unfathomably boring. If you missed it, honestly, you could just imagine the debate in your mind’s eye, and that would probably be accurate.
Perhaps a more deciding factor coming out of the States will be what happens when the US drops PCE inflation data tonight.
By the way: Biden’s golf handicap is down to a 6 (he achieved this while Vice President, he said. That must be a nice job.) That claim did manage to get a typical reaction out of Trump, who apparently cheats a lot at golf.
Australian Equities
- Guzman Gomez hits all time low of $27.xx on Friday
- Droneshield hits fresh all time high as upward momentum persists
- Canberra approves ANZ’s takeover of Suncorp despite supermarket concentration balk
Australian Economy
- Australian inflation unexpectedly rises to 4%, spooking markets
- Channel Seven and Nine announce triple digit job cuts within days of each other
- Traders push out RBA rate cut forecasts into 2025
International Equities
- NVIDIA hit by sell off on Monday as tech titan corrects
- Tamboran Resources dips into the red on first night trading on NYSE
- US Walgreens the worst performer on S&P500 after weak sales for pharmacy chain
International Economies
- Canadian inflation unexpectedly jumps weeks after BoC make first rate cut
- UK salaries advertised on Indeed hit 6 month high
- China mulls US$400K salaries for ‘finance elites’
- China tries once again to stimulate its property sector
Commodities
- Shipping costs hit 18 month high
- Chinese traders hit by copper short squeeze as Western speculators ramp up price
- Argentina’s first ultradeep offshore well comes up dry
Geopolitics
- Days after meeting leader, North Korea to send soldiers off for Putin’s Ukraine war
- Israel and Lebanon step up rhetoric; Israel threatens country with “stone age” bombing
- Biden and Trump debate market reactions suggest punters perceive Trump ‘won’