1. The ASX 200 came under heavy selling pressure yesterday once the bottom of this year’s trading range broke. The weakness in the CBA and other banks was a key driver of that move and Greg McKenna reckons it’s about time people figured out Australian banks can’t keep expanding margins and paying huge dividends when their margins are being compressed. It all adds up to this ugly technical outlook for Australian stocks that will give you the willies. Yes, the willies.
2. Iron ore blew back past $60 a tonne overnight. It’s clawed back more than 29 per cent in just over a month from its $47.07 low, but UBS reckons it will be a short party. The rally is tied to a production slowdown by BHP Billiton, but UBS says mine expansions due in the second half of the year could see prices drop back to $US45 a tonne.
3. Today the big data point for locals is the employment report for April. The market is expecting a small increase of 5,000 but there are plenty of calls for a drop in employment. The unemployment rate is expected to be 6.2%. Here’s your 10-second guide to the 11.30am AEST release.
4. You can still make money on Sydney real estate. Buy now and you’re buying overvalued stock, but according to a report in the AFR, prices haven’t peaked. Auction clearances are headed for their third consecutive weekend above the 80% mark. A spokesman for property research group BIS Shrapnel says “Prices will keep going up until the merry-go-round stops.” The merry-go-round is rates, which aren’t expected to rise now until late 2016.
5. Don’t link your social media accounts. Republican Senator Cory Gardner probably thought he was covering all bases on the social media side, but Twitter picked up his latest Instagram post and edited it to read:
Not that there’s anything wrong with that. But Gardner’s Instagram post went on to clarify “calling young men and women who have applied to service academies to let them know they have received an appointment.”
6. The CEO of $67 billion firm Fortress Investments, Michael Novogratz, sees an earthquake coming, and was happy to talk about it at SALT Las Vegas, the biggest hedge fund conference of the year. With everyone long the market and not wanting to be the first to blink, Novogratz says look to labour inflation in the US for the tipoff. “If that happens, the Fed is going to move,” he says. And when the Fed moves, Fortress will start offloading assets – regardless of who’s still easing around the world.
7. McDonald’s Australia is actually pretty good. In the US, the iconic fast-food chain posted its sixth straight quarter of same-store sales declines. Here, it’s gone three straight quarters the other way. Why? Table service, and some very UnMacca’s burgers:
McDonald’s CEO Steve Easterbrook has identified Australia as an international lead market and says expect to see its influence in the US soon.
8. Kim Kardashian, who made $US24 million last year, has some business advice for you. She wasn’t always a reality TV star, and tells the story of how she cashed in on her eBay shopping skills.
I remember I bought these Manolo Blahnik shoes that were $US700. He [Kim’s late father, Robert] let me buy five pairs. I had to pay him back plus interest. I sold every pair on eBay for $US2,500.
From there, Kardashian created a business of cleaning out her celebrity friends’ closets and selling the goods on eBay, while taking a cut of the profit. And then made a $5m sex tape.
9. If that’s not your money-making thing, try reading these 19 books packed with get-rich advice instead.
10. Nick Kyrgios beat Roger Federer, downing the top seed 6-7 (2/7), 7-6 (7/5), 7-6 (14/12) to move into the third round of the Madrid Open. He’s got a real issue with swearing and chucking his racquet that won’t be ignored too much longer, but the win won’t hurt his ranking, which currently sits at 35. If he can squeeze it to 32 or under by Wimbledon, that’s a much easier ride to the quarter-finals for the 20-year-old.
BONUS ITEM: In 1890, Thomas Edison’s company made dollies that sang nursery rhymes. Now, a digital reconstruction has enabled a couple of surviving dolls to “sing” for your kids. Here’s “Now I Lay Me Down to Sleep”. (Spoiler: It won’t help your kids sleep. At all.)
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