October 11, 2021

11 OCT 21 – Monday Market Highlights – Transcript

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Monday Market Highlights

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SUMMARY KEYWORDS

increasing, new south wales, non farm payrolls, market, wage inflation, expects, released, highlights, energy, email, print, revised, week, domestically, continues, kfc, yum brands, cbi, accelerating, oil producers

SPEAKERS

Roland Houghton

 

Roland Houghton 

Good morning. It’s Monday the 11th of October and I’m rolling from Milford. The key economic news was the US non farm payrolls, which was released last Friday. It was surprisingly soft, with non farm payrolls increasing by 194,000 verse market expectations of 500,000. This measure was somewhat suppressed by 120,000 decline in government employment. On the positive side, the incredibly strong July print was revised up by 38,000. In the soft August report was also revised up by 366,000, compared to the initial print of 235,000, so the softer print may very well be revised upwards in coming months. In addition, wage inflation continues to ramp in the US increasing 0.6% month on month taking annual wage inflation to 4.6%. The demand for labor clearly remains elevated and if at want to pay on total jobs, edit, and most certainly willing wages. The global energy crisis continues to worsen, which is driving up the price of energy related commodities all over the world. Brent oil futures for example, increased 4% last week, breaking through $80 a barrel the highest level since late 2018. This was also helped along by OPEC plus choosing to stick to the current schedule of production increases rather than accelerating the recovery production levels like some countries had hoped. This unfortunate confluence of events has seen many economies rushing to stock up on coal ahead of winter months, given inventory of other energy commodities, such as natural gas remained quite low. burning coal is of course terrible for the environment. And this event highlights some of the risk around the world’s rush to green energy generation. Unsurprisingly, coal prices continue to skyrocket, increasing 192% year to date. Domestically, Dominic pyrrhotite was named as New South Wales newest Premier, and in his first major move, He further relaxed New South Wales restrictions. The key changes are that residents in New South Wales can now have up to 10 people over the five kilometer travel limit has been lifted, and you can now have up to 500 people for ticketed outdoor settings. Turning to equity use, certain Australian sectors are really benefiting from the global energy shortages, Woodside and Santos for example, two of Australia’s largest oil producers rallied 7% and 6% respectively. Last week on the back of the FM mentioned rising oil prices, Colin’s food a KFC franchise or announced an agreement with yum brands whereby calls will become the corporate franchisee for the Netherlands, they committed to develop up to 130. net new KFC restaurants over the next 10 years. Collins rallied 7% on the day of the announcement, email the listed payments company released updated dialogue in the current regulatory tussle with the Central Bank of Ireland. The CBI seemed unhappy with the level of growth emails expecting to achieve through its remediation process. An email highlighted that some of the directions proposed by the CBI would materially impact the European operations of prepaid financial services. a subsidiary of email email fell 15% on Friday. Looking to the week ahead, the key economic data point will be the US inflation print to be released on Wednesday night. CPI is expected to increase 0.3% month a month with core CPI growing 0.2% month on month. domestically. We have employment data for September, which will be released on Thursday. The market expects total employed persons to fall by 138,000 and the unemployment rate to increase from 4.5% to 4.8%. Now the ASX IPO pipeline is very full and also appears to be accelerating. There are a number of companies looking to list over the next month and many of the book builds are being brought forward given the concerns around market stability. Remember it’s very hard to get investors interested in a business when the markets correcting thanks for listening. We’ll see you next week.

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