April 18, 2022

18 APR 2022 – Monday Market Highlights – Transcript

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Monday Market Highlights

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Roland Houghton
Good morning. It’s Monday the 18th of April and enrollment for Milford. The key economic news was US inflation with the headline print coming in at 8.5%. In line with market estimates, Core inflation, which excludes food and energy Rose 6.5% and may be okay to exclude certain metrics from core inflation, but it’s incredible how much these have increased with food up 1% month on month in energy up a massive 11% month on month. It’s important to remember that these are real costs of living for the average American. One of our preferred measures, which excludes a range of transitory items such as airline tickets, and use cars stabilized at point 4% month a month or 3.4% year on year. The UK also released their inflation print, with prices increasing 1.1% month on month in March or 7% year on year. Now turning to Australia, Australian employment data came out this week and was largely in line with expectations with the unemployment rate coming in at 4% versus 3.9% expected. However, when looking at the detail, unemployment was about 3.95% So was below 4% and was one of the lowest recorded data points on record. And New Zealand The central bank decided to raise rates by 50 basis points. This is in line with the market expectations as a New Zealand government tries to get inflation under control and key equity news IG to the Australian listed lithium nickel and copper miner, but again for western areas, western areas operates a large nickel mined. The revised bid is at $3.87 per share after the independent expert determined the original bid undervalue the business. Continuing with the m&a theme. The Morrison consortium which includes Brookfield and Commonwealth super at PSC have tied up unity wireless group. The agreed terms appear to have landed at $5 per share, or $3.6 billion for the Australian listed fiber provider. Email payments was also speculated to be in the throes of m&a. They confirmed that Bain Capital had approached them however, the talks had fallen over payments is an area under intense m&a scrutiny with the afterpay acquisition by square fresh and all investors minds. Finally, net wealth reported net inflows of $2.6 billion. This was below consensus, but it’s somewhat understandable given the heightened volatility we’ve seen in markets. What helped offset these lower flows was the higher cash balance which is quite profitable for net wealth. Looking to the week ahead, it’s quite quiet on the economic front. We have the New Zealand inflation rate with a market expects 7.1% inflation year on year and acceleration from the December quarter print of 5.9% and the US we have reporting season starting and we fascinating to watch how you as companies are dealing with heightened inflationary pressures the market we focus on the ability to maintain margins given the intense cost pressure. Thanks for listening. We’ll see you next week.

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