Good morning! Let’s get to it…
1. Waiting for the FOMC. The Fed’s statement is out tomorrow morning Australian time and the markets are positioning for a retention of the status quo – stocks were up overnight and the key commodity currencies including the Aussie dollar rose as well. The statement and Janet Yellen’s subsequent press conference will be the key. Business Insider’s full preview here.
2. Stocks rallied, with the Dow gaining 0.6%, and the S&P 500 and Nasdaq both up 0.8%. The Aussie dollar, as mentioned, also rose – back above US91c, but was falling again this morning. It follows a rough day in Asia yesterday, with the Nikkei down 0.2%, the Hang Seng off 0.9% and Shanghai tanking 1.8% on a fall in foreign inbound investment data. ASX futures are up a healthy 27 points on the US lead, however, ahead of the start of trade.
3. Warnings on the Aussie housing market Australia’s Reserve Bank issued, in its terms, a stern warning on the heat in Australian property at the moment in its monthly board minutes yesterday, saying that the current cycle could amplify prices and increase the likelihood of a fall later. But the Treasurer, Joe Hockey, says talk of a bubble from overseas commentators is “lazy analysis”. Which is fair enough – there’s a lot of demand, and a strong immigration program to maintain demand. Hockey says prices are a factor of supply shortages, “but you’d expect the market to react and produce some more housing.” But a funny thing tends to happen when supply goes up.
4. Boeing, Lockheed Martin, and Jeff Bezos are going to build a rocket. It sets Bezos in competition with Elon Musk and SpaceX. Who said the space race was dead?
5. Apple has apparently taken a stunning payments policy decision and will only allow the NFC chip in the iPhone to be used for payments on the Apple Pay platform. That means no apps. That means you can’t use the iPhone 6 to make payments using your banking app, unless that banking app runs the payment somehow through the Apple Pay platform.
6. Scotland votes tomorrow. Goldman Sachs notes history shows the Scots might bottle it, saying they “suspect that more Scots will vote for the ‘safe’ status quo in the official vote than have indicated in opinion polls — on the eve of Quebec’s independence referendum in 1995, opinion polls suggested that the ‘Yes’ vote would win 53% to 47% but it ultimately lost 49% to 51%.” This is the argument that the unknown factors will cause people to stick with the devil they know. Reminder: results start coming in Friday morning AEST.
7. Sean Connery, meanwhile, is nowhere to be seen. As Scotland gears up for its huge Independence vote tomorrow, its most ardent supporter of the Yes vote is absent. Sean Connery, once voted Scotland’s greatest living national treasure, even took to Parliament to state the case for freedom in 1999, but now he lives in the Bahamas for tax reasons. That immediately counts him out. And as his brother says: “There’s only a certain amount of days Sean can be in the country for tax reasons, so I know that he intends to use them wisely.”
8. Australian dairy farms are being bought up by a Chinese group. The Australian reports Ningbo Dairy Group has already bought a bunch of farms in Victoria and is hunting around for more. It’s part of the story of the rise of China’s middle class which is acquiring a taste for cheese products, one of the driving forces behind the battle for Warrnambool Cheese & Butter, which Saputo bought last year. The management believes they can squeeze more milk out of the beasts.
9. Yesterday it was VCs; today it’s the problem with startups. One of New York’s top VCs says the “burn rate” – the speed at which startups in the US are chewing through cash given to them in investments – is getting out of control. Fred Wilson knows a thing or two after having invested in Twitter and Zynga, and he’s clearly not happy with some of what he’s seeing from startups. “I’ve been grumpy for months, possibly for longer than that, about this… At some point you have to build a real business, generate real profits, sustain the company without the largess of investor’s capital, and start producing value the old fashioned way.” Sure, this isn’t talking about Australian startups specifically but it’s not like investors are going to think much differently down here. A cautionary note. Meanwhile, the James Packer-backed Square Peg capital is planning on ramping up investments, saying it could be investing $100 million a year soon, with an eye on expanding investments overseas, including in Israel.
10. A CEO and COO disappeared with a German listed company’s money. CEO Qingyong Wu and COO Minghong Wu, from Chinese urban shoe manufacturer Ultrasonic, have vanished. The CFO can’t find the money. And here’s their share price graph from overnight trade:
Bonus item: A Hong Kong tycoon has placed an order for 30 Rolls Royce Phantoms, the largest order in the car-maker’s history, for his Louis XIII casino. They’ll all be custom, naturally, and two of them will be the most expensive Phantoms ever made.
Have a cracking day. I’m on Twitter: @colgo
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