June 6, 2022

6 JUN 2022 – Monday Market Highlights – Transcript

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Monday Market Highlights

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Brendan Larsen
Good morning. It’s Monday, sixth June and I’m Brendan from Milford. In economic news last week, consumer confidence data out of the US fell 2.2 points in May 206.4. However, beating estimates of 103.6 looking into the detail, both expectations and assessments of the present situation declined consumer intentions to purchase new vehicles, homes and major appliances, all called non farm payrolls were also released on Friday. So in the US economy added 390,000 jobs in May versus consensus at 318,000. gains were broad based with notable gains in leisure and hospitality, professional and business services, and transportation and warehousing. This print turned out to mean good news is bad news has equity markets turned negative on the day and yield spiked, given a more buoyant US economy allows the Fed to continue on their hawkish path. Australian q1 GDP was released on Wednesday, rising 3.3% year over year, down from 4.4% in q4. The gain during the quarter was impressive considering hoursWorked fell 9% as a result of omachron disruptions, implying robust gains and productivity. Importantly for the RBA, average hourly earnings Rose 5.2% year over year, opening the door up for potentially more hawkish action next week. And stock news AGL decided to withdraw its plan to separate retailer AGL Australia and Xcel Energy caving into opposition from activist and top shareholder Mike cannon Brooks AGL believed the demerger, would not receive sufficient support to meet the 75% approval threshold. The CEO and Chairman have subsequently left the company. Origin energy finished the week down 10% After the company cut energy markets EBIT da guidance by 30% and withdrew guidance for FY 23. The company cited a material increase in coal purchasing costs, given high coal prices and continued exposure to high spot electricity prices as the reasons for the downgrade. Lithium stocks were also under pressure this week, with all Chem finishing the week down 15% and igvault, down 3.8% Despite each being down as much as 17 and 11%, respectively. This came on the back of alleged inappropriate pricing practices by exporters in Argentina, as well as the growing view that prices of the material are set to peak and the week ahead, the RBA will be the key focus with the market is pricing a full 25 basis point rate hike and a 75% chance of a 40 basis point rate hike. Strong average hourly earnings seen within the GDP report last week, arguably opened the door up for the RBA to be more hawkish at this week’s meeting. The other key piece of data this week would be us CPI, where the market expects a print of 8.3% year over year and 0.7% month over month, given the Fed has stated that the path of policy hinges on the trajectory of inflation data. This print will be watched closely by the market. Thanks for listening. We’ll see you again next week.

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