Good morning, and welcome to the week.
1. They’re calling it the “Icarus trade”, an optimism-driven trend seeing private investors plunge cash reserves into stocks. Bank of America Merrill Lynch sees this as leading to an inevitable fall, as Icarus did by flying too close to the sun. BAML’s view is based on their watching private clients’ cash reserves fall to record low levels:
BAML sees the fall coming in the second half of the year. “Icarus won’t soar forever.”
2. Finally, a political reform idea everyone can get behind, and it comes from Bill Shorten: fixed four-year terms for federal parliament. It would allow more long-term policy planning, and give federal governments more time to build political momentum around key reform proposals. It would come with the added bonus of steadying the media cycle a bit through reducing the air of crisis that mounts when a party is trailing in the polls, as we’re witnessing now with the Coalition. It would need a referendum and therefore bipartisan support, and there’s a major question over how to handle the Senate. More here. Meanwhile, the Liberal Party took a big step forward in its own internal reforms that would allow plebiscite votes on candidates, in a big win for Tony Abbott.
3. To markets, and the US dollar weakness continued on Friday, but the Aussie dollar has also hit resistance. Guy Debelle’s mild admonishment to the market about its reaction to the RBA minutes last Tuesday didn’t jawbone the currency much, and it opens the week just over US79c. ASX futures are pointing lower ahead of the open and iron ore fell for the second consecutive day when the spot price fixed on Friday night.
4. It’s a huge week ahead, with the all-important Australian consumer price index data out on Wednesday. Shortly after that, the RBA governor will speak at an annual lunch which has often been used by the bank to steer the market. On Wednesday night we get the Fed decision and Friday sees quarterly inflation figures from Japan. Here’s your full run-down.
5. Jordan Spieth is the Open champion, clinching the major title at Royal Birkdale overnight. He didn’t make it completely easy on himself, spraying his tee shot on the 13th and having to play in from the practice area, making bogey. But then staying ahead of the pack in golf is certainly a lot easier when you’re draining monster eagle putts like this.
6. Australia’s Michael Matthews secured the green jersey as the Tour de France rolled into Paris last night. Chris Froome secured his fourth overall win.
7. Amazon isn’t just a huge deal in retail — it is totally dominant in the cloud computing services category, too. Google and Microsoft are fighting back, but as Matt Weinberger explains in this must-read overview of the sector, Amazon Web Services “has become a kind of standard in cloud computing. Companies turn to AWS almost by default, in much the same way a previous generation of IT managers used to say that ‘nobody ever got fired for buying IBM.'”
Aside from that, Amazon is building another multi-billion dollar business you’ve probably never heard of. It did $US1 billion in revenue in its first year.
8. It was a huge weekend in Washington, D.C., with Donald Trump’s notorious press secretary and Sean Spicer resigning on Friday night after the appointment of Anthony Scaramucci as White House communications director. Scaramucci busied himself with deleting old tweets supporting gun control and complimenting Hillary Clinton. Trump unloaded on Twitter again about illegal leaks, but pointed out in the process that he had “complete power to pardon” himself or anyone else convicted as a result of the Russia probes.
9. With the new financial year kicking in, a lot of people might be staring down salary negotiations. Here are five things to avoid in those talks if you want to get what you’re after.
10. No, closing apps on your iPhone won’t save battery. It’s a myth.
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