10 things you need to know this morning in Australia

Good morning.

1. The Australian dollar is sliding ahead of huge day of economic data. At .7765, the AUD/USD currently sits at a three-week low, dragged lower by weakness in stocks and commodities on Wednesday. Looking ahead, the Ai Group’s manufacturing PMI report, CoreLogic’s monthly house price index and Australia’s Q4 private sector capital expenditure report will all be released this morning. Of all the domestic data scheduled, the latter will most likely to generate short-term volatility in the Aussie.

2. U.G.L.Y. The Dow Jones industrial average sank 375 points Wednesday, closing at 25,068, to end its worst month since 2016. The US economy grew slightly slower than initially reported in the fourth quarter, according to the Commerce Department’s second GDP estimate, rising just 2.5% compared to the expected 2.6%. And crude oil also slid 2.4% to $US61.50, its lowest in a week, while 10-year treasury bond yields lost a few basis points.

3. Spotify just filed to go public. The music streaming service has filed paperwork for its long awaited IPO. The company plans to list shares on the New York Stock Exchange under the ticker “SPOT” but is doing it in a very weird way. It is offering its shares directly to investors, bypassing the typical Wall Street process where banks are hired to find buyers for the shares. The “direct IPO” means that Spotify will sell shares without a set price, without a set level of supply of shares, and without a lock-up on existing investors. And the lack of the so-called “bookbuilding” process typically handled by underwriters means that Spotify’s stock won’t have a safety net if investors turn sour on the company.

4. “You can’t negotiate with reality”. The EU believes it can “force” the UK to accept an agreement which keeps Ireland in the customs union after Brexit. It comes as the EU Commission released a draft Withdrawal Bill which would legally commit the UK to keep Ireland in the customs union if the UK cannot propose an alternative solution which avoids a hard border between north and south Ireland. It leaves Brit prime minister Theresa May in a difficult position because she has committed to avoiding a hard border in Ireland, but also pledged to leave the customs union.

5. Litecoin is on track to be the top performing cryptocurrency in February. It will be one of the few major cryptocurrencies to end February in the green. The fifth-largest digital token by market cap is up more than 21% for the month, well outperforming bitcoin’s 4% drop.

6. JPMorgan wants to become the Amazon of Wall Street. At an investor day presentation, CFO Marianne Lake set out the bank’s “Digital Everywhere” strategy and said:

“We are already deeply embedded in our customers lives at a scale and a frequency that we believe is unmatched.”

Meanwhile CEO Jamie Dimon mentioned Amazon Prime as a model for JPMorgan’s banking efforts. JPMorgan’s ability to implement this digital strategy across multiple business lines, many of which just happen to be market share leaders, has the potential to reshape the entire industry.

7. Um, what? The Commodity Futures Trading Commission, the regulatory agency overseeing bitcoin futures, says employees can trade crypto. The agency decided on the ruling after an influx of “inquiries”. The reaction to the news has been less positive, with some saying it will likely “skew their regulatory decisions”.

8. Amazon may be “doubling down” on its Alexa. The US retailing giant’s recent acquisition of a smart doorbell maker says a lot about its next big driver of growth and its attempt to boost its home automation efforts, according to Macquarie analyst Benjamin Schachter. Get ready for the smart home revolution.

9. Bigger fish to fry. Billionaire founder of The Virgin Group, Richard Branson, says he didn’t know the difference between “net” and “gross” until age 50, and it didn’t stop him building an empire. He explains that an entrepreneur’s job is to create the best business possible, and let other people – like accountants – take care of the details.

10. A trip to Bali? Cheap as chips, or at least a candy bar if you’re a billionaire. The mega rich view money differently than the average person. For example, the typical billionaire could easily afford to spend $100 million each year, while most Australians earn less than $62,000.
We crunched the numbers on 12 purchases to find the relative “cost” for someone with a $US2 billion fortune. Here they are. (Dollar values in USD)

BONUS ITEM: Welcome to the next evolution of man kind. Pediatricians have warned that children are finding it harder to hold pencils because of technology. Choosing an iPad to play with rather than colouring books could be stopping their finger muscles developing. It is part of a growing trend in both men and women, according to a recent study by occupational therapists, which shows as work patterns have changed, hand grip has significantly weakened.

As a society, we’re no longer agricultural or manufacturing… What we’re doing more now is technology-related, especially for millennials.

Have a great day.

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