Trader’s Diary: Everything you need to get ready for the week ahead
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We had some top shelf volatility last week, bookended by some wonderful, characteristically contradictory data out of China.
Monday delivered hopelessly anaemic retail data – sales crashing more than 11% year on year, almost twice what was reckoned with. Industrial output fell almost 3%. And that’s what happens when you lock-down your working population.
The People’s Bank of China, (PBoC) the central bank of Xi Jinping, disappointed as new bank lending in China wallowing at its lowest ebb in circa five years – despite Beijing allowing for a wee trim in mortgage loan interest rates for a segment of home buyers. Token, token effort.
Tuesday to Friday arvo was a catalogue of volatility as the tension between rising rates and faster rising inflation played out to a backdrop of war, (looming) famine and ongoing supply chain disintegration.
US shares fell more than 3% last week, making it seven weeks of losses on the trot.
All was rather lost on both a fiscal and an emotional Friday morning, until our dormant friends at the PBOC, up and cut the key five-year Loan Prime Rate by 15bp to 4.45% – an unusually deep cut.
I (and my mum) believe I said it best on the day – something about buyers bargain hunting in arvo trade, reassured to the hilt that Beijing will ensure the struggling property sector remains totally in play and that it all smells a lot like some stimmy is in the post.
Ending the week on a high, Chinese shares rose 2.2% and our shares gained 1% largely on China’s monetary easing as tech, utility and material stocks more than offset falls in consumer and energy names.
From peak Wall Street a few months ago, US stocks are now down some 20%, the tech-laden Nasdaq, 29%. Tesla’s Elon Musk can probably accept some blame, he was everywhere doing nothing. Although he has started to sound a bit like ex-US President and reality TV host Donald Trump.
UK inflation rose again in April to 9% YoY, leaving the Brits’ central bank on track for more rate hikes, while Fed player James Brian Bullard CEO and president of the St. Louis clique, reiterated the Fed’s mantra on clubbing inflation and hiking rates to above neutral with a near-term series of 50bps hikes, and that markets had repriced according to Fed guidance.
He did say the Fed could still be cutting rates in 2024.
Our jobless rate was 3.9%, unchanged from the downwardly revised March figure of 3.9%. Together with the 0.7% Wage Price Index (WPI) data, these were considered a miss. CBA’s Queen of Calculation, senior economist Katrina Clifton, says the bank is sticking with its forecast of the RBA nudging the cash rate ahead by 25bp at their next, June 7 meeting.
Westpac’s rate pack of Andrew Hanlan, Bill Evans, Elliot Clarke, Justin Smirk, Matthew Hassan, Michael Gordon, Nathan Penny, Ryan Wells & Satish Ranchhod reckon an RBA hike of 40 basis points in June “is still the best policy.”
Scott Morrison was Prime Minister on Friday. This morning that is no longer the case.
Looking ahead, at home we’re doing retail data on Friday… and on the global calendar it’s totally a PMI week.
Sources: Commsec. Westpac, Trading Economics
RBA Assistant Governor Kent is speaking at 9:05am
Q1 construction work done
RBA Assist’ Governor Ellis speaking at 9:45am.
Q1 private new capital expenditure and 2022/23 capex plans
April retail sales
German May IFO business climate survey
UK May Rightmove house prices
US Apr Chicago Fedspeak
Japan May Nikkei services PMI
Japan May Nikkei manufacturing PMI
EU May S&P Global manufacturing PMI
EU May S&P Global services PMI
UK May S&P Global manufacturing PMI
UK May S&P Global services PMI
US May S&P Global manufacturing PMI
US May S&P Global services PMI
US May Richmond Fed index
US April new home sales
NZ RBNZ policy decision
US Apr durable goods orders
US FOMC May meeting minutes
US Q1 GDP, annualised
US Initial jobless claims
US April pending home sales
US May Kansas City Fed index
NZ May ANZ consumer confidence
China April industrial profits
EU April M3 money supply
US April wholesale inventories
US April personal income, spending
US April PCE deflator
May University of Michigan sentiment read
Listing: 24 May
Tabcorp Holdings (ASX:TAH) is planning to demerge its Lotteries and Keno business into The Lottery Corporation.
The Australian lottery operator and provider of Keno products has operations in all Australian states and territories except for Western Australia, and distribution through retail outlets, Keno venues and online.
Listing: 25 May
IPO: $6.5m at $0.20
The explorer is targeting large, high-grade base metal and battery mineral deposits in Western Australia.
The company has a large and highly prospective tenement package that covers approximately 100km of strike of the northern margin of the highly prospective Edmund Basin.
The projects include Brumby Deposit, Vernon Base Metals, Vernon Nickel-PGE and Gorge Creek which are highly prospective for zinc, copper, silver, PGE and uranium deposits.
Listing: 26 May
This explorer is focussed on assets prospective for nickel, lithium and gold in the Goldfields-Esperance region of WA.
It actually holds the largest land package ever held by one company in the history of exploration within the Lake Johnston Greenstone Belt and says the region has been historically overlooked and underexplored – with the Lake Johnston project never the main focus for nickel majors that previously held the ground.
Listing: 27 May
IPO: $6m at $0.20
The company has two lithium projects – the Solonopole Project in Brazil and the Napperby project in the NT.
Solonopole’s permits cover historic artisanal mining sites previously mined for lithium, Coltan (tantalum and niobium) and tin.
And Napperby is in the Pine Creek Pegmatite province – which hosts Core Lithium’s (ASX:CXO) Finniss project.