Good morning! It’s a huge week ahead. Here’s what you need to know…
1. Mixed markets. The Dow managed to eke out some gains (0.11%) on Friday but the Nasdaq was down 0.12%. The continuing fall in the iron ore price is weighing on the Australian markets though, with the ASX futures contract 8 points lower at 5495 bid. In the region, Japan’s huge inflation number on Friday – CPI rose 3.4% year on year, the highest in two decades – has led to calls for an end to to QE in Japan. The Nikkei fell 0.34%.
2. Epic data week. It’s one of the busiest weeks of the year so far on the data front with a raft of numbers out each day that can move markets. PMIs for countries around the world are out today – important leading indicators for the health of the global economy. There’s also the AiG PMI, expected to show further contraction in the Australian manufacturing sector, as well as TD inflation. Tomorrow there’s retail sales for April in Australia and the RBA issues its monthly statement on interest rates – there’s no change expected but the market will be on the lookout for any commentary on the impact of the federal budget, which has clearly been a drain on consumer confidence. On Wednesday there’s Australian Q1 GDP and on Thursday there’s the April trade balance. That night there’s the monthly ECB statement where more stimulus including an historic negative interest rate is expected, and then on Friday night there’s the US jobs report. There’s a full preview here.
3. Who’s buying DJs shares? David Jones is trying to figure out who bought 50 million of its shares last week. The shares changed hands on Friday, the same day it was reported that Solomon Lew had taken a $14 million (0.65%) stake over the past fortnight. There is some speculation that Lew may be attempting to block the takeover proposal from South African retail giant Woolworths. He hasn’t commented. More here.
4. Goldman’s rate cut call. In a note to clients on Friday, Goldman Sachs said it expected the RBA to cut interest rates to 2.25% in September. It had previously forecast a cut as early as July but says “growth momentum has slowed materially in 2Q14, financial conditions have tightened and an audible snapping in consumer sentiment post the Budget has taken sentiment to levels not seen since prior to the current rate easing cycle”. Tim Toohey and team say some time is needed to regroup on the changes in the economy in recent months, including from the federal budget, but conclude an “assessment of forces that shift the RBA policy bias in the past has reinforced our belief that further monetary accommodation is required”.
5. Abbott’s tin-ear D-Day statement. The Australian Prime Minister released a video yesterday which linked together two incongruous themes: D-Day commemorations in Europe and Coalition trade policy. In a statement, accompanied by a video, Abbott noted that “Over 3,000 Australians were involved – including 2,500 air force personnel who provided air support for the Allied landings.” He continues: “Following the D-day commemorations, I will be travelling to Canada and the United States – and will be joined by Australian business leaders. My message to overseas investors is that Australia is open for business.” It goes on to talk about cutting red tape and getting rid of the carbon tax. You can see what he was trying to do – linking freedom and common values with trade – but it misreads the solemn place of D-Day in European history and just comes across as, well, weird. Here’s a sample of the reaction:
Hope the PM has time to visit Auschwitz and remind the world about the Medicare copayment.
— John Birmingham (@JohnBirmingham) June 1, 2014
6. World Cup corruption. There’s now pressure on FIFA to re-run the vote for hosting rights to the 2022 World Cup after the UK’s Sunday Times exposed alleged payments of around $US5 million to officials in return for support of Qatar’s bid. Australia spent tens of millions on its campaign for that vote only to receive support from just one country. A story to follow this week.
7. Apple’s big rollout. Apple shares rose on Friday in US trade with anticipation building about the company’s product rollout in the coming months, especially around the iPhone 6. Apple, remember, has been losing market share and under fire for its apparently slowdown in innovation. But Apple SVP Eddy Cue said last week that the company had “the best product pipeline that I’ve seen in my 25 years at Apple”. It starts today: the company will brief on software updates at a developer conference in San Francisco tonight, and there will also be some sort of new hardware.
8. Detroit in decay. If you tuned out on the weekend, you missed this heads-up on the state of one of the hardest hit cities in the US housing crisis. On his Tumblr “goobingdetroit”, Alex Alsup has stitched together incredible images of neighbourhoods literally falling down before Google Street View’s eyes since 2008.
9. The Ken Cowley quotes. Former News Corp CEO and chairman Ken Cowley is seeking legal advice over an article in the AFR which contained a range of quotes highly critical of his former company. He was critical of Rupert Murdoch’s choice of Julian Clarke as CEO and described The Australian as “pathetic” and said News Corp co-chair Lachlan Murdoch was “not a great businessman”. The Australian explains today that Cowley believes the story was “not a true reflection” of the interview; the AFR is standing by its story.
10. Alice has died. Yes, the Bradys’ housekeeper, who could always be turned to for sensible advice whenever the kids’ parents never understood them. Alice seemed ageless in the 60s and 70s, but succumbed to a hemetoma at 88 just this morning after falling and hitting her head in her bathroom.
Bonus item: A guy throws a paper airplane from the nosebleed seats, and it gets caught by a player on the field way down below. What a moment.
Have a great day. I’m on Twitter: @colgo
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