10 Things You Need To Know This Morning In Australia

Tim Cook at the Apple launch event. Photo: Getty

Good morning! The iPhone 6 is out, and Apple’s stock is down a bit. Here’s what you need to know…

1. Australia is set to raise its terror alert level to “high” for the first time ever since the five-tiered threat system came into use in 2003. ASIO director-general David Irvine told the ABC last night that he was “contemplating very seriously the notion of lifting it higher” and that the current threat level was at a very “elevated level of medium”. The new level means an attack is “likely”, and the next step up is to “extreme”, where an attack is imminent, or has occurred.

2. iPhone prices in Australia. You might have been amazed at the iPhone 6 and 6S launch prices in the US – $US199 and $US299 – wow! Sadly, you’ll be paying – wait for it – $869 and $999 when it lobs on September 19. But keep in mind those US prices are for iPhones on a two-year contract. Apple didn’t release the price of an unlocked phone in the US for some reason. They’ll still cost more here, and it will probably still annoy you, but it will be significantly less if you’re into plans.

3. And what to make of it? As Jay Yarow points out, Apple is the iPhone company – around 70% of its profit comes from the product – and it now has a highly robust iPhone product line with a great price options across the customer spectrum. The iPhone 6 plus also gets the company back on the dance floor against the likes of Samsung, whose bigger screens have turned out to be much more appealing than Apple anticipated. Apple’s other big play here is the Pay platform, which aims to change the way people pay for things the world over. Shares fell a little on the initial launches, then recovered, and then fell again on the release of the Apple Watch during the event. (More on the Apple Watch here.) Here’s a chart of Apple shares on Tuesday, and what happened to shares after the announcements.

4. To the markets, and the main US bourses were all lower in the session overnight, with the Dow off 0.6%, the Nasdaq down 0.9% and the S&P 500 down 0.7% to close at 1,988. After a mixed day in Asia yesterday, ASX futures are down 17 points, indicating the Australian market is likely to follow the falls in the US as usual.

5. The Aussie dollar is getting smoked. It’s approaching its weakest levels in six months, with the US dollar in the ascendancy on the global currency markets. The Aussie traded below US92c last night and was sitting just above that level this morning. It’s light on the data front today but we get the Westpac consumer sentiment this morning where economists will be looking for a sustaining of the post-budget recovery.

6. Iron ore prices are getting crushed. Australia’s big iron ore producers who, along with Vale in Brazil, are at the bottom of the cost curve might want to be careful what they wish for in their battle against smaller miners and Chinese production. Their insouciance to the fall, indeed their encouragement – they can keep turning up supply to edge out the competition – seems to have materially impacted sentiment with iron ore and coal both pole-axed overnight. September iron ore fell 96 cents a tonne to $83.70 but December futures lost $1.76 to $82.24. December Newcastle coal dropped 90 cents to $66.75 a tonne.

7. Hedge funds are after SMSF money. The AFR reports this morning that hedge funds are looking at ways to capture some of Australia’s $550 billion pool of self-managed retirement savings.

8. The biggest risk in the global economy is still a hard landing in China. That’s according to SocGen’s quarterly chart of “swan” risks, with the black swans being the unforeseen events that could trigger chaos in the global economy and financial markets. A 2 percentage point drop in Chinese growth would cut a full point off global GDP growth, SocGen warns. They assign a 20% probability to the event. The other black swans are Eurozone stagnation, a sell-off in US Treasuries, and a full-blown conflict in Ukraine.

9. The house that Jamie Durie built. He’s arguably Australia’s most celebrated interior designer, so here’s a great chance to get a look at what Durie has done to his own house at Avalon, on Sydney’s northern beaches. He bought the four-bedder in 2003 for $1.3m and not surprisingly, it’s expected to fetch a fair bit more when it goes to auction. You’ll also get some of the furniture he helped design. Sadly, inspections are by appointment only, but there’s more pics at the listing here.

10. Thermomix got an update. There’s outrage across the country as spoiled housewives (and, no doubt, the odd house husband) everywhere vent their rage at the release of the new Thermomix. For the uninitiated, that’s the $2000 blender that magically turns all your ingredients into meals. But customers who bought the TM31 model last week are claiming they were told there were no new models on the way, so imagine their despair when the TM5 dropped on Saturday – for $10 less. The humanity.

Have a cracking day. I’m on Twitter: @colgo

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