Good morning! Here’s what you need to know as the clock ticks down to the weekend…
1. FOUR POINT TWO PER CENT. The US economy had a roaring Q2, with GDP growth for the quarter being revised up to 4.2%, largely driven by a rapid rise in business investment. This has been one of the missing parts of the US recovery – after a long period of using cash for things like stock buybacks in amid an uncertain outlook, companies are finally shelling out for new plant and equipment in a spending boom. Fixed investment was up 8.4% for the quarter, much stronger than the initial 5.5% estimate.
2. Stocks fell, though, with headlines of escalations in the Ukraine (more below) seeing investors reduce some risk. The Dow and the S&P 500 were both off 0.2% while the Nasdaq was down 0.3%. It follows losses across the Asian markets yesterday, with Shanghai down 0.6% to 2,196 (a big technical break), the Nikkei off 0.5% and the Hang Seng down 0.7%. The ASX was down 0.5% yesterday and futures are pointing to a slightly lower start as well.
3. Russia’s invasion of Ukraine. NATO released satellite images overnight showing what it says are Russian military formations inside Ukraine – putting the lie to Russian claims that its soldiers in the area are there of their own free will. Here’s one of the images, which shows guns allegedly pointing North towards Ukrainian-controlled territory, with support vehicles. It certainly doesn’t look like a bunch of guys on holiday.
4. The Qantas conundrum. Some observers were bewildered early yesterday to see the airline’s share price climbing – up 8% at one point and closing up 7% for the session – after the company booked a record $2.8 billion statutory loss. Basically the market has bought the management’s message that the company is about to return to profit, “barring factors beyond our control”, and that its transformation program is underway. There are a few problems here, not least the currency risk – a fall in the Aussie would drive up the already soaring fuel bill. But really what needs to be understood about much of the commentary is how many people hate Alan Joyce’s guts. He has overseen a tumultuous period for the airline, including shutting the whole thing down on a Melbourne Cup weekend, and led a failed lobbying attempt for a dramatic government intervention to save the airline which has only resulted in some tinkering with the Qantas Sale Act. The last six months have seen record losses and the instigation of a mass redundancy scheme. He’s still there, though, and if he can restore profitability in the next six months it will be quite an achievement.
5. Virgin Australia’s results are out this morning, and the airline that joined Qantas in the crushing capacity war over the last year has posted a $212 million underlying loss for the year, with the statutory loss tripling to $356 million for the year. It’s in line with expectations. The airline also announced the sale of 35% of its Velocity loyalty program to Affinity Equity Partners – an interesting move considering that many were expecting Qantas to float or sell around the same amount of its loyalty program, but they bottled it.
6. Next week is epic for the Australian economy. It has been a quieter couple of weeks but from early next week we get a deluge: the Reserve Bank September interest rate decision and statement on Tuesday, the Q2 GDP data on Wednesday, and retail sales on Thursday. There’s also the local and global PMIs and the ECB decision, and then the US jobs report on Friday night.
7. Twitter has analytics for everyone. The social platform has opened universal access to its analytics engine, which allows you to see how many people saw your tweets over a given period, and which tweets were successful. Jim Edwards takes it for a test run here. It’s simple to use; it also, strategically, helps Twitter show the reach of its platform and gives an incentive for better content – two areas the company is struggling to convince investors that it can continue to grow.
8. Cheap foreign labour is back. The Australian government wants to let businesses hire foreign workers at rates 10% cheaper than local workers for projects where they struggle to find people in regional areas. It will initially apply to Darwin but be rolled out to other areas suffering skills shortages, according to a report in The Australian. You won’t need to look far today to find some poorly thought-through outrage.
9. “Google Dorking” is a thing, and it matters to business. The new term refers to using some of Google’s advanced search features to dig up information that doesn’t get surfaced in normal searchers. The US government has been warning businesses about the kinds of information that could be found about companies, their customers, or their staff through some Google Dorking.
10. Finally, Brad Pitt and Angelina Jolie are married. On Saturday, in a sneaky ceremony in a wine chateau in the south of France, Hollywood’s biggest couple tied the knot. Even Jolie’s dad, movie legend Jon Voight, didn’t know. The pair got their marriage license in California and the ceremony has been dubbed “a family affair” with all the Brangelina kids involved.
Bonus item: There’s lots of research now on how to pick the best photos for your online dating profile. Here’s the best of it, with a sample below. You’re welcome.
Have a cracking weekend. I’m on Twitter: @colgo
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