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30 AUG 21 – Monday Market Highlights – Transcript

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Monday Market Highlights

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SUMMARY KEYWORDS

week, equity, milford, retailers, equity valuations, numbers, year, data, market, non farm payrolls, australian, reporting, conditions, highlights, idp, high, coming, dovish, landlords, sell

SPEAKERS

Fraser Jack, Roland Houghton

 

Fraser Jack 

You’re listening to the Monday market highlights brought to you by Milford.

 

Roland Houghton 

Good morning. It’s Monday the 13th of August and I’m rolling from Milford, Jerome Powell open the Jackson Hole symposium last week, stating that substantial further progress has been made for inflation and that although there has been clear progress towards maximum employment, it’s not where they want it to be. And that the Delta variant poses new risks. They have focused on how the labor market evolves in the fall. With vaccinations, rising schools reopening and enhanced unemployment benefits coming to an end, they believe they will no longer be any artificial factors holding back job seekers. It has been coined as a defiantly dovish speech by investors, as although he reinforced his desire to start winding back asset purchases this year. He highlighted the shouldn’t be taken as a signal for interest rate hikes implying we shouldn’t expect high rates anytime soon, the US Dollar fell 0.4% against a basket of currencies posts comments, Biden’s approval rating dipped below 50% for the first time in his presidential campaign. This does have implications for the midterm US elections to be held in late 2022. With both the House and the Senate Majority up for grabs. Predictions at this stage suggests a loss of control to the republicans for both chambers. This of course is very fluid and a lot can change between now and November next year. And key equity news australian reporting season is winding up with only two more days for companies to report their full or half year results. Like all reporting seasons, it has been very interesting. We’ve had a number of equity sell downs with insiders from Universal stores, corporate travel management, IDP education, zero and net wealth all selling equity. retailers have seen tough trading conditions to start the financial year, with many carrying much more inventory than last year. This has raised some concerns, particularly for apparel retailers around the potential inability to clear winter stock as we will likely be coming out of lockdown and much warmer conditions than when we entered it. Mergers and Acquisitions are a big feature of today’s markets. With capital activity likely to remain heightened as long as equity valuations stay high and debt remains very cheap. Asset valuations continue to burn particularly for industrial properties. With key industrial landlords seeing property valuations increase anywhere from 13 to 30%. Looking to the week ahead, it’s a relatively quiet one, with only two days of reporting season left and little economic data to be released. A couple things to look for. As Australian GDP data with the market expects 0.5% quarter on quarter growth, or 9.2% year on year growth. The annual numbers are distorted by the week prior period. So I’d focus more on the quarterly numbers. And addition the US non farm payrolls data is released on Friday, with expectations of a further 750,000 increase in new jobs slightly down a 943,000 edit in July. Thanks for listening. We’ll see you next week.

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