Good morning, and welcome to Wednesday! Here’s what you need to know.
Beats in the US. Three big data releases in the US beat expectations overnight: durable goods orders, the Case-Shiller home price index, and the Markit flash Services PMI which at 58.4 far outstripped expectations of 55.4. More here. Markit says the “pendulum appears to be swinging towards firmer economic growth” in the northern summer.
Markets rise. Stocks rallied on the strong data in the first trading session back after a three-day weekend in the US. The S&P hit another all-time intraday and closing high, finishing up 0.6% to 1911.91. The Dow was up 0.4% and the Nasdaq had a strong day, up 1.2%.
Asia to follow. There’s little data of note in the region today so markets are likely to follow the US into positive territory and ASX futures are pointing to a rise at the open. Shanghai was down 0.32% yesterday while the Nikkei was up 0.24%.
China tensions. The skirmishes around China’s territory continue. Yesterday, a Chinese fishing vessel rammed and sank a Vietnamese fishing boat. Over the weekend Chinese jets flew within metres of Japanese military planes over the East China Sea. And a huge oil rig China has in the South China Sea – the cause of the recent deadly protests in Vietnam – has finished drilling in one spot and is about to move to another area.
Fearful Aussie consumers. The two key surveys on Australian consumer sentiment – the Westpac-MI monthly survey and the ANZ-Roy Morgan weekly index – have been showing increasing consumer anxiety in Australia, and it all appears to be driven by the federal budget. The fall continued yesterday with the release of the latest Roy Morgan data. It’s now clearly the scariest chart in the Australian economy:
The government is now very aware of the importance of selling the budget to people and also convincing them that it’s not going to hit them as hard in the short-term as many people clearly think it will. Negotiations are getting underway with the minor parties in the Senate to pass the measures but with the new Senators to arrive in July the uncertainty may well continue for weeks to come. One strong point: both of the consumer surveys show people are actually more positive about economic conditions in the long-term. Perhaps the government should be starting there and working backwards.
Chromecast is here. Google’s streaming device that plugs into your TV and lets you watch video streamed from a phone or laptop is available for $49 in Australia from today. The wave of disruption to traditional TV services long underway in the US is now starting to really heat up in Australia. Rumours persist about Netflix, the home of House of Cards, launching in Australia at some point, though the company says it has no firm plans as yet. It’s still a long way from being a worry for Foxtel however, especially when it comes to live sport.
The entrepreneurial delusion. A review of the characteristics of successful people shows one overarching theme: they are over-confident. This is a necessary basis for a “can-do” attitude so sought-after in organisations, but it also borders on a person’s delusion about their ability. Nobel Prize-winning psychologist Daniel Kahneman says it’s necessary, given the extremely high failure rate of small businesses. But the optimism and belief also makes for leaders, because people are drawn to them more than to realists. More here.
Google logo change. It’s only the slightest shift imaginable but it was picked up on Reddit (where else). Google has made a change that looks to be about a pixel’s worth to two letters. We’re not sure if this is a case of too much time on people’s hands, or Redditors having superhuman eyes.
Surface Pro, no. Business Insider’s Steve Kovach reviews the Surface Pro 3, which Microsoft has done a pretty good job of positioning as the tablet that can finally replace your laptop. Steve disagrees. “This is my third Surface review, and it’s the third time I have to say the same thing. The Surface Pro 3 is a mediocre tablet and a mediocre laptop. Put those two together, and you have a pricey device that still isn’t as ideal as using something more traditional.” Yow.
Origin time. The greatest rugby league rivalry gets underway again tonight, with NSW hoping to avoid a ninth consecutive series loss to Queensland in the State of Origin series, known for its thrilling moments and hard tackles. Here’s a reminder of what these guys are putting on the line.
Go hard. Go Blues.
Have a great day. I’m on Twitter: @colgo.
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