Good morning! It’s Friday; you made it. Let’s start with the big picture…
1. The importance of the US recovery to the Australian economic transition is outlined in a new note from senior ANZ economist Felicity Emmett and colleague Dylan Eades. Critically, the business investment outlook is looking brighter, as we saw this week in the NAB business survey. Emmett told BI that “both long term and short term fundamentals point to strengthening non-mining business investment: capital stock is low, corporates have deleveraged and have tidy cash balances while rates remain very low. More importantly, confidence – the key ingredient – looks to be returning to the business outlook”. There’s a strong correlation between the Australian investment cycle and that of the US – something that has suddenly started looking brighter in recent weeks.
2. Europe, meanwhile, is a big fat zero. European GDP was dead flat for the second quarter, as the picture in the Eurozone continues to look increasingly sickly. Economists had expected growth of 0.1%. The number followed disappointing GDP reports from Germany, which declined by 0.2%. “The poor figure is chiefly driven by downside surprises in Italy, France and Germany which all failed to grow in the second quarter,” said Pantheon Macroeconomics’ Claus Vistesen. More here.
3. But stocks rallied , following the “bad news is good news” pattern that stems from the assurance that central banks will maintain dovish policy settings in the face of stagnating growth. Former PIMCO boss Mohamed El-Erian notes in a post for Business Insider that “there is a limit to how long [this approach] can be divorced from the question of the ultimate effectiveness of unconventional policies… [it] requires that the valuations of risk assets be eventually validated by the policy-induced destination. Yet, rather than converge towards such an outcome, the world is getting further away.”
4. And on the scoreboard, the main US bourses were up 0.4%. It follows a mixed day in Asia yesterday, with Shanghai losing 0.76% to 2,206 and the Nikkei up 0.67%. The ASX gained just over 0.6% yesterday and SPI futures are up 23 points to 5517 ahead of the start of trade.
5. There’s a battle brewing in the online broking world between the big players, which inludes CMC and IG Markets, and the rest of the industry over just how safe your money is. At question is whether client money is really segregated from the brokers money and how this might expose traders to risks not only of the brokers business and other traders. Greg McKenna has the details.
6. How to win at life. Ryan Allis just turned 30 and he’s already sold a company for $US170 million. He’s created a huge slide deck showing everything he’s learned over the past year. His advice includes details like: “Important people like opening FedEx packages.” It’s 1,284 slides long but easier reading than you think.
7. Another night of tension and violence in Ferguson, Missouri. As police opened up with tear gas and smoke bombs on crowds protesting the fatal shooting of a black unarmed teenager, US President Barack Obama weighed in. “Now’s the time for healing, now’s the time for peace and calm on the streets of Ferguson,” Obama said during a televised appearance in Martha’s Vineyard. “We all need to hold ourselves to a higher standard, particularly those in a position of authority.” And Fox News got this strong statement from civil rights icon Martin Luther King’s niece, Alveda King.
8. Newspaper circulation horror show. Sales figures for Australian daily newspapers are out and they are ugly, with year-on-year falls of around 10% for the print copies of many metropolitan titles and a shocking 20% year-on-year fall for The Age in Melbourne. On balance the news on digital subscriptions is good: year-on-year growth has been very robust, but in recent quarters it has started to slow – a sign that the market is starting to mature. There’s a detailed report at Mumbrella.
9. Paris Hilton’s sister is marrying a Rothschild. Nicky Hilton is engaged to her boyfriend James Rothschild, defying the Rothschild family tradition of marrying your first cousin, but right in keeping with marrying into other family money. Hilton an heiress to the Hilton Hotel empire, and is a great-grand daughter of the founder, Conrad Hilton. Expect lots of mock turtle soup sipped from gold spoons at the wedding.
10. Standing by Kurtley. The Wallabies take on the mighty All Blacks tomorrow in the first game of this year’s Bledisloe Cup series. All the talk has been around the pressure on Kurtley Beale, the surprise pick at No.10 for Australia. “I picked the team to play the All Blacks, to beat the All Blacks. That’s what I picked the team to do,” says coach Ewen McKenzie. Here’s hoping.
Bonus item: Downton Abbey has a plastic water bottle. Surely, this is a publicity stunt. In this latest promo shot sent out by the Downton Abbey crew, Robert, Earl of Grantham, and Lady Edith Crawley stand for a likeness capture. To their left, a water bottle on the mantlepiece (We added the red ring):
After it was quickly pointed out, the producers removed it from the official Facebook page, but the hilarity had spread and Twitter got the now-mandatory Photoshop alternatives. The show’s creator Julian Fellowes, said that the new series deals with the estate entering the industrial world. Quite.
Have a cracker weekend. I’m on Twitter: @colgo
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