Good morning – it’s Thursday in a big week. Let’s go…
1. Boom. Nearest the pin with Australia’s GDP figures was Soc Gen, which in the Bloomberg survey shared on Tuesday correctly called the year-on-year growth number at 3.5%. Also yesterday we got a withering assessment of the stock market from Soc Gen’s famous equity bear, Albert Edwards. The two things are almost entirely unconnected, but still…
2. … it was the number that surprised everyone. Only one bank had a more bullish expectation – Morgan Stanley – in that Bloomberg survey. The 3.5% growth rate for Australia’s economy really did catch everyone offside. Amid a lot of talk about how that number can’t be sustained, or that it might be a bit of a mirage, it’s worth remembering that almost all of the smartest economic minds in Australia underestimated the growth of the economy.
3. To the markets and trade is starting to thin out ahead of two huge events in the next two days. In the Asian timezone we can expect to wake up to historic-low interest rates from the European Central Bank, possibly including a negative interest rate – charges for banks to hold money – in the ECB policy decision tonight. The Australian dollar is still trading the mid US92c range – closer to US93c this morning after the GDP print yesterday. On Friday night we get the US jobs report.
4. What it all means politically is that the Coalition is now in a bit of an awkward position where they’ve been telling people Australia is in crisis when, in fact, it is clearly not. (This is not a political point, just a statement of fact.) Australia has some huge momentum that will cover some evil from the harsh US winter that dragged on growth. So the economy isn’t a problem, but the structure of public spending sure is – and that’s what the government is banking people will come to understand over the coming weeks.
6. Today and tonight we get HSBC services PMI for China, as well as Australia’s trade balance numbers. Later there’s initial jobless claims out of the US ahead of the May jobs report. The big show, though, is the ECB announcement mentioned above.
6. Venture capital disaster. Mark Carnegie’s not exactly a rogue investor – you might say he’s the face of slightly-non-consensus investing in Australia. But he’s always good for a quote and today he has this: “The truth of the matter is, Australian venture capital as an industry has been an unmitigated disaster. A trained monkey could have done better than the professional venture capital industry in Australia.” Harsh and unfair, but he is calling attention to a really important point in the Australian investment landscape. Also, where are the investors? Just asking.
7. What not to do. A developer from Atlassian, Australia’s poster-boy technology company, somehow decided to make the following points in a post about Maven software
It will be clear to regular readers but in case you’re dropping in: this is shared without approval. It’s a good reminder that if you’re speaking publicly and will be representing your company, run it past someone first. Or more importantly, avoid these opinions in the first place.
8. Sydney is beautiful at all times of the year, but everyone you run into has been raving about this year’s Vivid festival. The north end of the CBD and parts of Darling Harbour are in lights for four more days. Business Insider’s Executive Life editor Simon Thomsen has the guide to what you have to see. Go have a look.
9. Take heart. Even a Renaissance man is occasionally on the job hunt. This is a great insight into what kind of a time the late 1400s was for an artist in Europe. Leonardo da Vinci, trying to break out of artist-laden Flornce, had to pitch himself as an inentions man in Milan to get a leg-up. Here’s a rundown of his cover letter to prospective employers, including the classic: “I will assemble catapults, mangonels, trebuckets and other instruments of wonderful efficiency.”
10. On indulgence. Business Insider reached 1.2 million Australian UBs in May, another record for us. For six months now BI has been the most-read business publication in the country. We’re also bigger than the AFR and the WSJ on the new Nielsen ratings platform, Answers (it gave us a reach of around 480,000 Australians in April.) And we’re only getting started. Thanks for reading!
Bonus item: Think your working conditions and / your commute are hard? Watch this video about bus drivers having to wear nappies.
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