12 JUN 2023 – Monday Market Highlights – Transcript
Monday Market Highlights 12 June 2023
Proudly sponsored by Milford
Good morning, it’s Monday the 12 June and I’m Nick from Milford. Looking at the key economic news from last week:
Domestically we had the RBA interest rate decision for June, where they decided to hike rates a further 25bps bringing the cash rate to 4.1%. This was a surprise to the market, with expectations set on another pause. The key driver of the hike was to give the RBA greater confidence that inflation will return to targets levels after recent strong data prints indicated further upside risks to inflation. It’s also worth noting that the final paragraph remained unchanged to prior statements noting that further tightening may be required, while remaining data dependent.
Continuing in Australia, Q1 GDP growth came in at 0.2% q/q, below consensus of 0.3%. Although still indicating economic growth, the pace continues to slow.
In the US we had a weak ISM services print falling to 50.3 in May down from 51.9 in April and below forecasts of 52.2. Details were soft across the board with new orders down to 52.9 from 56.1 and business activity and new export orders also decreasing.
Moving to the EU, GDP unexpectedly contracted in Q1 coming in at -0.1% v expectations of 0%. Details showed household and public sector expenditure decreasing. After the revision down in Q4 2022, this is the 2nd consecutive quarter of negative growth for the EU.
We also had the China inflation print coming in slightly below expectations for May at 0.2% y/y compared to expectations of 0.3% and a print of 0.1% in April.
Turning to Equity news:
It was a busy week in the NZ market, on Tuesday we had EBOS announce that they lost their major contract with the Chemist Warehouse to Sigma group, which is coming up for renewal in June 2024. It’s worth noting that Sigma included equity in their deal, giving Chemist Warehouse approximately 10% ownership post issuance.
On Wednesday Infratil announced that they will acquire the remaining 50% of One NZ (previously known as Vodafone NZ) from Brookfield for $1.8b. The funding for this included an $850m equity raise, at $9.20 a share.
On Friday we also had the Auckland council vote in favour of selling down 7% of their 18% stake in Auckland International Airport as part of a plan to reduce local government debt. This mean a sale of c103m shares for $875m.
ASX Limited had a downgrade at their investor day on Tuesday where they talked through a new tech strategy. They noted increased capex requirements, increased cost growth, they trimmed the dividend payout policy and will raise 200-300m in debt to give balance sheet flexibility.
Baby Bunting came out with a downgrade at their trading update last week noting very weak sales. They downgraded their guidance and talked to comparable store sales being down -4 to -5% of the current trend continues.
Looking at the weak ahead, it’s a busy week on the economic front,
On Tuesday we have the US inflation print out for May and UK employment data.
On Thursday the US interest rate decision and FOMC economic projections will be key to watch. We also have the Australian employment data out on Wednesday which the RBA will watch closely.
Later in the week we have US retail sales out with expectations of -0.1% for May.
The ECB interest rate decision is also this week with the market pricing in a 25bps. Hike.
We have the final EU inflation print for May
And In the US we have the preliminary University of Michigan sentiment survey out on Saturday.
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, …
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 …
AdviceTech Podcast #51 – Canva
In this episode, Peita is joined by Donna Moritz, Canva Verified Expert. They talk about using Canva’s design …