1. Let’s start with the craziest Bathurst ever. It was certainly one of the most unpredictable. Chaz Mostert won the Great Race from last on the grid after breaking the lap record and hitting the lead for the first time in nearly eight hours of racing with just half a lap to go. And he only did so because Jamie Whincup ran out of fuel and rolled over the line in fifth. There were 10 safety cars out during the race, the first few because a part of the $2m resurface – on Turn Two – fell apart, causing the race to be stopped for an hour for track repairs. And there were kangaroos and footballs on the track. Just fantastic.
2. Now, to the markets. In Asia on Friday, it was also an ugly day’s trade likely to be replicated again today. The Nikkei was off 1.15% to 15,301, the Hang Seng dropped 1.89% and the Shanghai B index dropped 0.6% to 2,375. While offshore markets will drive trade today in the region there is some very important data in China this week with the release of new loan, trade and inflation data vitally important to views on its economic health.
3. So is it a stock market air-pocket? US fund manager John Hussman says all the signs are there, in his latest weekly Market Comment ominously titled “Air-Pockets, Free-Falls, and Crashes” in which he warns of “large, abrupt losses”.
Present conditions create an urgency to examine all risk exposures. Once overvalued, overbought, overbullish extremes are joined by deterioration in market internals and trend-uniformity, one finds a narrow set comprising less than 5% of history that contains little but abrupt air-pockets, free-falls, and crashes.
4. The Aussie dollar will rally out the year. That’s the call from Westpac despite the currency being is under 87 cents this morning and not far above the low for the year of 0.8660, but Westpac chief economist Bill Evans and his economics team have steadfastly stuck to their 90 cent call for the end of the year.
Over the six months to early September the AUD had remained firmly in the well worn 92.5¢ to 94.5¢ range. We were constantly required to justify our call for a target 90¢ by the end of the year, with the clear implication being that the call was overly pessimistic. The AUD has now clearly undershot our year end forecast. However we are not “chasing down” the AUD. We are retaining our year end call of 90¢.
Evans is also confident of a 15% rise in iron ore prices for the same period.
5. It’s a big week for data. Not a lot in the way of key releases, but with stock markets around the world looking for an excuse to crumble, everything is important. The big question for Australian markets and traders is whether the market is racing toward a market crash or is this just your ordinary garden-variety market sell-off with no longer term implications. US retail sales on Wednesday night is probably the week’s number one data release globally closely, followed by the Fed’s Beige book early Thursday morning.
6. One million Australians are living in severe poverty. According to research released today, about 5% of our population is defined as having access to household income of less than 30% off the national median. A lone person in poverty typically has no more than $133 to live on each week after deducting housing costs, with many surviving on even less. A couple with children makes do with income of $261 each week after paying rent. Yes, the Lucky Country has a working poor – and more than 60% of them are in NSW and Queensland.
7. A second person in Dallas got Ebola. The healthcare worker who had contact with the first patient to die of Ebola in the US has contracted the disease. And authorities can’t identify any breach of handling protocol, which Centres for Disease Control and Prevention director Tom Frieden says “is very concerning”. While he wouldn’t say protective equipment doesn’t work, one professor told BI they can “put 12 pairs of gloves on somebody, but if they touch something contaminated and then touch their eye” all those precautions are of little help. Now US cities and states really are scrambling to get their control measures in place.
8. It’s not easy having $30 billion. Pity poor Larry Page and Mark Zuckerberg, who have all they need in life. But all you need doesn’t necessarily mean all you want and Y Combinator co-founder Paul Graham is here to explain why unlike you or I, Zuck “will never get to bum around a foreign country”. Basically, it’s because Facebook runs him as much as he runs Facebook, and there are plenty of days where that’s exactly as unpleasant as it sounds.
9. The Block favourites won. But was real estate the biggest loser? Coffs Harbour siblings Simon and Shannon took out The Block Glasshouse last night but if the prices paid at auction for the apartments are any guide, Australia’s overheated property market is cooling… or at least the demand for celebrity-driven housing slapped together in a hurry by amateurs is over. Simon and Shannan went home with $435,000 all up after their apartment sold for $1.9 million, $335,000 above reserve, but the final three properties selling for such tiny amounts over the reserve, even an underquoting real estate agent would be embarrassed.
10. Oh, Wallabies. Coach Ewen McKenzie is the latest in a string of Wallabies’ coaches who may once again be forced to fall on their sword because spoilt, overpaid players can’t behave-slash-perform. Excuse the editorialising, but we’re getting a bit tired of having to read more about the off-field antics of the likes of Kurtley Beale, who’s clearly stepped over the line one too many times in involving a female staffer in a crude texting scandal, and less about about how they’re winning games. Beale’s teammates, of course, are taking the oh-so-predictable line of backing their mate over the coach.
Rant out, enjoy your day.
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