Good morning! The RBA announces its monthly cash rate decision today. Here’s what you need to know…
1. US stocks bounced back in the first trading session of the week, with the Dow up 0.5% and the Nasdaq and S&P500 up 0.8%. ASX futures are four points up ahead of the market open in Australia, where stocks fell yesterday following the weaker US close on Friday. Across Asia, stocks were mixed, but Shanghai warrants some attention after ripping 1.73% higher to 2,223, close to one-year highs. So the global picture: after things looked dicey for a couple of days late last week, it looks like normal service has resumed for now.
2. But is the wolf finally coming? Jonathan Krinsky at MKM Partners uses the analogy of the boy crying wolf to describe the market activity over the past year and a half. Small falls in the market represented buying opportunities as stocks continually reversed direction soon to make new highs. The big question now is, when the S&P hits 1900, will it be another low on the way to record highs, or will it be the start of a breakdown. Here’s his chart:
3. It’s RBA day. Australia’s central bank releases its monthly cash rate decision and accompanying statement at 2.30pm AEST. There’s no change expected to interest rates, but as usual the market will be paying close attention to the statement, especially on whether the bank’s board still believes a period of stability in interest rates is the best course. The decision follows Australian trade data, with the balance expected negative, out at 11.30am AEST.
4. Israel and Hamas have agreed a 72-hour ceasefire. If it holds – previous attempts have failed – it could mean we’re at the end Israel’s Operation Protective Edge targeting Hamas infrastructure in Gaza, which has left some 1800 dead, the majority civilians. Overnight, an IDF soldier started a Reddit “AMA” session and discussed his experience, and his thoughts on how it will play out. Compelling reading.
5. Australia’s Future Fund is now worth more than $100 billion after turning in a strong year – returns were 13.9% over the past year, and 10.3% over the past three years. But there’s a problem: the public sector superannuation liabilities, which the fund was set up to cover, have ballooned, and will total $200 billion by 2020. That explains why chairman Peter Costello is talking about the fund’s singular focus on performance over the next six years.
6. McDonald’s says its results will be affected by a scandal in China surrounding one of its suppliers. OSI group was shut down last month for selling out-of-date and rotting meat to, among others, McDonald’s and Yum! Brands, which runs KFC and pizza hut. Like Yum, McDonald’s says the exact impact on the bottom line can’t be determined, but the affected market accounts for 10% of global sales.
7. Android web traffic has overtaken iOS in the US. It’s an important milestone, because while Android devices have been outselling Apple devices for some time, it appeared users of the Android platform weren’t as engaged with their devices as iPhone and iPad owners.
8. Messaging app Yo picked a fight with what it calls clones last week, lodging a number of copyright infringement notices with Apple. Aussie-based app Oi!, which also enables users to send one-word messages got sucked into the confusing row. But it appears Yo founder Or Arbel has now stepped away from the legal letters, telling Business Insider last night the complaint against Oi! no longer stands.
9. Sandra Bullock is killing it. Thanks to “Gravity”, she made $US51 million last year, a surprising stretch ahead of Jennifer Lawrence at $US34 million, according to Forbes.
10. National Geographic photo contest winners are out. You can see them all here. Here’s just one of the striking images:
Have a cracking day. I’m on Twitter: @colgo
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