Good morning, and welcome to Thursday – the end of a three-day working week in Australia, with the ANZAC Day public holiday tomorrow. Here’s what you need to know:
US stocks fall. Disappointing data on housing starts and flash manufacturing PMI doused the mood in the US session overnight, with the Dow finishing flat, the S&P500 down 0.2% and the NASDAQ down 0.8%.
Australia rally. The Australian market hit a post-GFC high yesterday and despite the weak US session futures are pointing to another high at the open. Some of the mood may have been lifted by Apple and Facebook both reporting earnings after the US close and beating expectations on revenue and earnings (more below). The Nikkei was up 1.09% but the Shanghai index fell 0.28%. The China leading index is out today at 12pm AEST.
Apple crushes it. The Cupertino tech giant’s share price was up 8% after its earnings announcement, reporting beats on revenue ($US45.6 billion vs $US43.6 billion expected), EPS (a huge $US11.62 vs $US10.16) and iPhone sales (43.7 million vs 37.7 million). The company also announced a 7-for-1 stock split, which will make the shares a bit more accessible to retail investors, and announced a big increase in its share buyback allocation from $60 billion to $90 billion. Activist investor Carl Icahn, who has been agitating for increased buybacks by Apple, tweeted his pleasure at the news.
So does Facebook. Apple may have been the big surprise but Facebook also beat expectations, with delivering some eye-popping numbers in its Q1 results. Revenue was up 72% to $US2.5 billion (over $US2.36 billion expected) and earnings per share were $US0.34 ($US0.24 expected). Mobile accounted for 59% of ad revenue, up from 30% in Q1 2013. The stock was up 3.8% in after-hours trade. The customer growth appears to have reached saturation in the US and Europe, but is growing in Asia and the “rest of world” segments. Details here. With its vast user base (approaching 1.3 billion) Facebook is a hugely important part of the web’s infrastructure right now so there’s something for anyone whose business touches digital to think about from its audience patterns which you can read more about here.
Inflation contained. The Australian dollar is back below US93c after yesterday’s inflation data showed prices rises remain relatively controlled. The headline number of 2.9% was well short of the market expectation of 3.2%. This gives plenty of breathing room for the RBA to stick to its view that it’s time for a period of stability in interest rates.
Yet more budget warnings. Since federal Parliament rose at the end of March the Australian public has been subjected to an extraordinary softening-up exercise with repeated government warnings of the extent of reform and spending cuts that are necessary to start reducing the government deficit. Hockey’s speech continued that theme, pointing out that the biggest spending programs – including aged pensions – are the ones growing fastest, clearly an unsustainable scenario. You can read the full speech here. Importantly Hockey announced the findings of the Commission of Audit, the feared razor gang that reviewed government spending over the summer, will be released next Thursday.
Uber anger. The Australian taxi industry has another reason to hate Uber, the car-booking app that is rapidly transforming the sector. Uber plans to launch a new service that allows registered members of the public to offer their cars for Uber rides. The NSW Government is also asking Uber how this complies with legislation around passenger hire cars. More here.
Real estate rankings. Sydney is the eighth most-expensive city in the world for real estate as measured by dollars per square foot. Tiny Monaco is the predictable table-topper in the global rankings from Knight Frank, which you can see here, showing what a million bucks will buy you in property around the world.
Buddy’s crash. Star AFL recruit Buddy Franklin, whose transfer to the Sydney Swans in a monster nine-year, $10 million deal stunned the sport at the end of last season, totalled three (pretty nice-looking) cars by smashing into them in an upmarket eastern suburb of Sydney last night. There are three points to note. There was no alcohol involved. Buddy’s OK. But his Jeep is not.
Beiber blunder. Justin Beiber managed to offend over a billion people by posting a photo to Instagram of Japan’s Yasukuni Shrine, a hugely controversial monument to Chinese and South Koreans as it honours WWII Japanese soldiers, including some convicted war criminals. The photo had received 666,000 “likes” on Instagram by the time he removed it, and later posted: “While in Japan I asked my driver to pull over for which I saw a beautiful shrine. I was mislead to think the Shrines were only a place of prayer. To anyone I have offended I am extremely sorry.” Another lesson in the benefits of reading books.
Bonus item: Google Street View now has a time-travel option, so you can see what streets looked like in earlier versions. You might be able to see your house before it was renovated, for example.
Have a great day and enjoy the long weekend. I’m on Twitter: @colgo
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