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Episode details

Roland Houghton 

Good morning. It’s Monday, the second of August and I’m rolling from nothing. The lockdown in Sydney was extended by at least four weeks and as expected additional stimulus was obtained, which is now more similar to last year’s job keeper. On a positive note, the vaccination rate continues to increase and we are approaching 1 million vaccinations per week. This should continue to grow as we receive more Pfizer doses. Australian CPI data was released and saw prices rise point 8% quarter on quarter, which was slightly hidden consensus, the stakes annual inflation to 3.8%. And although not rampant, some pressures are building with fruit and vegetable prices. For example, at 5.1% quarter on quarter, the parliamentary Budget Office did some interesting analysis, which showed 12 and a half billion dollars of job keep payments were paid to companies whose turnover did not fall by the 30% threshold and in fact 4.6 billion and winter firms whose turnover rose we’d expect to see more headlines around this and a corporate job keeper repayments over the next weeks and months. In equity news, China’s stocks got smashed early last week before recovering a touch as increased government regulations spooked global investors. There’s massive governance risk in these stocks given the government’s heavy handed approach to any company that becomes near too large to control that sizzle openpay and laybuy released the q4 results over the last two weeks, which showed continued strong growth particularly for those exposed the US. Despite this customer additions was slower than what most people expected, which clearly made the market nervous, given three of the four sold off for quite materially on the day of their announcements. Timberland Webster, the online home wear company had a bumper result with full year sales growing at 8% year on year. The market was particularly pleased with the trading update, which highlighted they were still growing very strongly in July despite comping the heightened trading period last year, spark infrastructure received a higher bid from the same consortium with the offer price increasing 5.4% to $2.95. This year, spark have allowed increased di d to the consortium posts this revised offer. The US reporting season is charging along with the big technology companies reporting largely fantastic results. Despite this, the share prices have been less rewarding than one would have thought which highlights the heightened valuations. Some of these companies are trading on tuning to the week ahead. We’ll be keenly focused on Australia reporting season which kicks off this week. Large caps generally report earlier on in the month with a mad rush of small caps and the final week of August, expect largely strong results across the board. However, the lockdown will likely see softer July trading updates for some and guidance commentary will be more limited than a normal period given the uncertainty. The RBA has their monthly meeting tomorrow, and the market will be closely watching to see whether they walk back on the QE easing they previously highlighted. It will also be interesting to see their interpretation of the current COVID outbreak and how that will impact Australia. A bit of economic data to look for in the US is the is m manufacturing index, and also the non farm payrolls data which is our newest on Friday. This will be particularly interesting given the labor issues many companies are highlighting. Thanks for listening. We’ll see you next week.

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