15 MAY 2023 – Monday Market Highlights – Transcript
Monday Market Highlights 14 May 2023
Proudly sponsored by Milford
Good morning, it’s Monday the 15th of May and I’m Nick from Milford.
Looking at the key economic news from last week:
Starting in the US, we had both headline and core CPI increasing 0.4% m/m for April, in line with market expectations. This brings the annual inflation rate to 4.9% slightly below consensus of 5%. Looking at the subcategories in more detail, food price inflation grew at a slower rate, energy costs continued to fall and importantly, shelter costs, a large weight in the CPI basket, also slowed for the first time in 2 years from 8.2% to 8.1%.
We also had the Producer price index out in the US, a data set that measure the change in selling prices received by domestic producers. Prices increased 0.2% m/m compared to expectations of 0.3% and following a 0.4% drop in March.
Finally in the US we had the University of Michigan consumer sentiment survey out for April. The preliminary data a showed a sharp fall to 57.7, down from 63.5 in March and below expectations of 63. The preliminary consumer expectations numbers were also weak falling to 53.4 from 60.5 in march and below expectations of 59.8. The soft print continuing to illustrate consumers concerns about the direction of the economy.
In the UK we had the March GDP numbers out coming in slightly below market expectations at 0.3% y/y vs expectations of 0.4%. The bank of England also had their interest rate decision last week, deciding to raise the bank rate 25bps to 4.5%, in line with consensus. The market continues to price in another full hike at the next meeting and likely another hike following.
Moving across to China, The April headline inflation print came in below expectations at 0.1% y/y compared to market expectations of 0.4%. Looking at the subcategories both food and non food prices continued to ease. Continuing in China, we saw credit growth slow materially in April with new yuan loans at coming in at 718.8b about half of what market was expecting. The weak credit growth and aggregate financing potentially pointing to soft underlying growth in the economy and the need for the peoples bank of China to continue easing.
In Australia we had federal budget out on Tuesday. The package details included a 4 year $14.5b package to help households and small businesses with the increasing cost of living pressures. They are targeting reduced energy costs, healthcare reforms and sector specific wage growth. The budget included a large allocation to clean energy industries such as renewables, CCS and hydrogen and supported industries such as primary steel, cement, lime, and alumina to decarbonise. Lastly in Austrlai we had the final retail sales numbers out for March, increasing 0.4% m/m, unrevised from the preliminary reading and up from 0.2% in February.
Turning to Equity news:
Allkem, an Australian listed lithium company with assets in Argentina has announced plans with Livent to merge in an all stock merger of equals, forming a new company with a market cap of approximately US$10.6b . There appear to be plenty of synergies between the 2 companies and the stock closed up c15% on the day.
Silver Lake Resources revised their bid to buy the Leonora assets from St Barabara. The total value was the same but split included more scrip that St Barabara could hold on the BS to provide liquidity. The new bid also addressed various concerns with regards to timing and conditionality. Silver Lake are currently waiting for a response from St Barabara which is expected to be in the coming week.
CSR, a building products provider for residential and commercial construction reported their FY23 result which was strong than the market expected. The beat was primarily driven by the building products section, with aluminium and property in line with guidance. They did give weaker Fy24 guidance on aluminium than expected which would have been taken negatively by the market.
Looking at the week ahead:
On Tuesday we have the RBA minutes, the commentary around the decision to hike will be important for the market.
We also have the employment data out in the UK, with consensus estimates unchanged for the unemployment rate at 3.8%.
On Wednesday we have US retail sales with the market estimating 0.7% m/m compared to -0.6% for march.
On Thursday we have the Aus employment data out, with the market expecting employment change to increase by 25k people and for the unemployment rate to remain unchanged at 3.5%.
Thanks for listening, we will see you next week.
28 AUG 2023 – Monday Market Highlights
This week we cover the Jackson Hole Economic Symposium, Global PMI data, Australian and New Zealand reporting season, …
21 AUG 2023 – Monday Market Highlights
This week we cover the RBA cash rate decision, Australian employment data, the RBNZ’s interest rate decision, US …
14 AUG 2023 – Monday Market Highlights
This week we cover US CPI data, Australian Reporting Season, Estia Health and Bain Capital, Invocare and TPG …
7 AUG 2023 – Monday Market Highlights
This week we cover China dropping the Barley tariffs, the US Core PCE Index, the Michigan Consumer Sentiment …
31 JUL 2023 – Monday Market Highlights
This week we cover the US PCE price index, Australian CPI data, the Bank of Japan, Megaport, and …
24 JUL 2023 – Monday Market Highlights
This week we cover US earnings, UK CPI data, the Australian labour market, New Zealand CPI data, Flight …
17 JUL 2023 – Monday Market Highlights
This week we cover Phillip Lowe stepping down as RBA Governor, US June inflation, the University of Michigan …
10 JUL 2023 – Monday Market Highlights
This week we cover RBA rates, US employment data, the ASX200, M&A activity, JLG, Suncorp, and Redox.
3 JUL 2023 – Monday Market Highlights
This week we cover Australian CPI data and retail sales, Collins Foods, Harvey Norman, Walgreens, and Nike.
26 JUN 2023 – Monday Market Highlights
This week we cover the US stock market decline, the Bank of England interest rate hike, UK inflation, …
Engine Room Podcast #19 – Drew Burden
Drew is a Partner and Co-CEO of MBS Insurance. He and Andrew cover the ins and outs of …
AdviceTech Podcast #54 – Oko Adviser
This week, Peita talks with Tom Culver, Founder and CEO at Oko Adviser. They discuss the features of …
416 Jeff Thurecht
Jeff is Director and Personal Financial Adviser at Evalesco Financial Services. He and Clayton talk about where they …
Engine Room Podcast #18 – Brett Wright
This week, Andrew is joined by Brett Wright, Founder at Lifebid. They take a look at how the …
Investment Podcast #1 – REITs and Real Assets
James Maydew from Macquarie joins Morningstar’s Jody Fitzgerald and host James Whelan to go under the hood for …
AdviceTech Podcast #53 – Finito
In this week’s episode, Peita is joined by Thabojan Rasiah and Matt Boyd, Co-Founders of Finito. They discuss …
#415 Craig Keary
Craig is the Chair at Ensombl. He and Clayton chat about the changing concept of retirement and reframing …
Engine Room Podcast #17 – Glen Reilly
In this episode, Andrew sits down with Glen Reilly, Director and Lead Adviser at Fitzpatricks Private Wealth. They …
AdviceTech Podcast #52 – Moxo
This week, Peita talks with Nikhita Iyar, Head of Product Marketing and Growth at Moxo. They discuss Moxo’s …
#414 Silvia Wade
Silvia is the Director at Mutual Plans. She and James discuss implementing paraplanning into your business, and the …