What grabbed the headlines last week?


Major global share markets fell over the last week, as higher bond yields weighed. We also learned that, in America, a convicted felon can totally run for president.

The current pres might need to pipe up a bit.

That’s because ex-pres Donal Trump was found guilty on 34 counts of election fraud. He’s scheduled to be sentenced on July 11, just four days before the Republican National Convention, when the party will officially nominate him for president.

Trump is leading Biden in polls by around 1 point, but around 14% are undecided and 15-25% of his supporters have indicated they will reconsider if he is convicted of a crime.



Against this, the guilty verdict may just serve to galvanise support amongst his base. Straight after the guilty verdict the PredictIt betting market saw the probability of a Biden victory rebound to just below that of Trump. But there is a long way to go yet.

The wheels of justice grind on, the bolts of comprehension which hold the wheels of sanity together are fading under the strain:

The victor in this blood match seeks out the fun lovin’ crinimal republican nominee

Joins TikTok, the app he tried to ban.

@teamgutierrez2024 #duet with @President Donald J Trump #DonaldTrump #DonaldJTrump #Trump #Trump2024 #TeamTrump #TrumpTrain #MAGA #ULTRAMAGA #RedWave #RedWave2024 #PresidentTrump #PresidentDonaldJTrump #RealDonaldTrump #Trump47 ♬ original sound – President Donald J Trump


For the week US shares fell 0.5%, Eurozone shares lost 1%. Japanese shares fell 0.4% and Chinese shares fell 0.6%. This still left US shares up 4.8% in May and global shares up 3.8% after the weakness seen in April.

The local benchmark ASX200 (XJO) index rallied gallantly on Friday, making back almost 1% and slashing  the weekly decline to just 0.3%.

As Aussie bonds around them sold off on rising yields, local traders jostled to price in a small chance of RBA hikes, after the April CPI indicator showed a modest tick‑up in inflation.

At its nadir on Thursday, the ASX200 had walked back almost 4%, but come the close on Friday, it was smack in the middle of its last four months’ trading range, hence our current market neutral stance.

Last week, local markets and the economists what watch them were laser-focused on the April CPI indicator, which showed a modest tick‑up in inflation at 3.6%y-o-y.

But AMP chief economist Dr Shane Oliver says Aussie inflation is likely to resume its downtrend and the economy is looking weaker, and still sees the next RBA move as being a cut.

“The RBA is likely to again consider the case for another rate hike at its 18 June meeting just like it did at its May meeting.”

With April inflation dropping higher than consensus (3.4%) but closer to CBA’s expectations for a 3.5% read, says CBA economist Stephen Wu.

“We don’t expect this to have any immediate implications for near‑term monetary policy; the RBA has already noted that they would ‘look through short‑term variations in inflation’, and their forecasts are for inflation in Q2 24 to be 3.8%/yr.”

Stephen adds that perhaps catching the central bank’s eye would be the unexpected strength in clothing & footwear prices in April.

“If the disinflationary pulse for discretionary goods does not continue, or if the current cautious consumer behaviour changes, the RBA may re‑consider their judgment on the consumer outlook, particularly in light of tax cuts and other cost‑of‑living measures coming through from 1 July.”

The central bank said it’s “acceptable” to look through some of the short‑term wobblies in inflation. That makes this week’s GDP figures and the outcome of the yearly award wage decision big bingo.


The ASX200 closed up Friday, gaining 73.50 points or 0.96% to 7,701.70 after setting a new 20-day low.


Telix Pharmaceuticals (ASX:TLX) and West African Resources (ASX:WAF) were up 15.31% and 6.99% respectively.

BHP’s (ASX:BHP) thirrd and final bid to snatch Anglo American for $75 billion fell through its fingers, a cluster-structured  hot mess meaning neither side could understand what was happening.

A core condition as per the (large/great/big?) Australian’s initial mid-April shot required Anglo to spin off its majority stakes in two listed South African miners.

BHP didn’t want them but was up for an all-share lunch of what would be left of Anglo American.

Anyhoo, that’s blown.

The failure means another offer is on ice  since UK law prohibits BHP from making another bid for six months unless there’s a rival offer, Anglo invites another approach offer, or there is another material change in circumstances.

BHP is moving in a clear direction.

It’s the single Aussie miner with with its hands on the copper lever. But…

“BHP has to contend with a drop off in Escondida headgrades in FY27 which won’t be offset until either a new and larger concentrator replaces the busted up Los Colorados concentrator and/or large-scale sulphide leaching can be employed,” Citi told clients last week.

“In FY24 we estimate BHP is most leveraged to copper at ~22% of attributable EBITDA, followed by S32 at 19% and then RIO at 10%.”

That contributed to the hit ASX Resources stocks endured, although Utilities were the worst performers, lacking 2.3%.

Of the 11 ASX sectors, five ended lower and six still closed positive for a volatile week:




Not the ASX

Don’t need to know too much French when the news is so mauvaise: 

Via Le Monde

Elsewhere, the Standard & Poors  applied the blowtorch to the French economy, downgrading the rating for France from “AA” to “AA-“, citing the Macron government’s failure to meet its targets for easing the massive pandemic/energy crisis double-whammy of a budget deficit.

Following that substantial spending, the French budget for 2023 was 5.5% of GDP, which S&P noted was “significantly higher than we previously forecast”.

S&P stated that while reforms and an economic recovery will lead to improvements, the deficit will still exceed 3% of GDP in 2027.

Moody’s credit rating for France was last set at Aa2 with stable outlook. Fitch’s credit rating for France was last reported at AA- with stable outlook.


Narendra’s India

Narendra Modi is all set for another term as India’s rather powerful prime minister.

On Saturday night  both the exit polls and Indian TV stations and agencies which ran them seemed to evnisage a much stronger than expected showing for the already favoured (National Democratic Alliance) Bharatiya Janata party and its little coalition mates.

The Modi-led National Democratic Alliance winning a comfortable majority of between 353 and 401 seats in India’s 543-seat Lok Sabha, or lower house, and easily beating the opposition INDIA alliance, a coalition of parties coagulating around the formerly ruling Indian National Congress.

And which Modi makes mincemeat of every five mins or so:

That leaves Modi with a strong mandate to form the next government, taking him into a second decade as prime minister.

“The opportunistic INDI Alliance failed to strike a chord with voters,” Modi said in a series of posts on X on Saturday evening.

In India’s last election in 2019 the NDA won 352 lower house seats, of which the BJP on its own won 303. The Election Commission of India is due to report official results on 4 June.


Meanwhile speaking at the Shangri-La Dialogue in Singapore, where Australian Defence Minister Stephen Marles found himself all but shirtfronted by a gang of loiteriong Chinese generals,  the US and Chinese sides are apparently as far off the mark on shared values as they are in media translations of the same event.


Via Global Times

The view from the US was slightly different.

Admiral Dong Jun vowed that anyone who aims to separate Taiwan from China will face “self-destruction,” wrote CNBC.

The admiral called on “forces for Taiwan independence” to “abandon the illusion and return to the right track of reunification.”

“Anyone who dares to separate Taiwan from China will only end up in self-destruction,” he threatened.


Meanwhile, late on Sunday here in Sydney, China landed a spacecraft on the far side of the Moon for the first time to grab samples and suss out its likelihood for a lunar base, according to the China National Space Administration.

State news agency Xinhua hailed the landing as the “first endeavour of its kind in the history of human lunar exploration”.


OPEC+ meets 

Last week WTI crude futures fell over 1.1% to settle at US$76.99 a barrel on Friday, marking a 6% decline for the month, the worst performance since November, ahead of expected OPEC+ cuts.

The decision by OPEC and non-OPEC countries on output levels will greet markets on Monday as the cartel is scheduled to hold online meetings on Sunday.

Reports suggest that the oil alliance will extend the voluntary cuts of 2.2 million barrels per day into the second half of 2024 while the pledges by all OPEC+ members to restrict output by 3.66 million bpd could be stretched into 2025.


Wall Street

Last week, despite stronger turn out on Friday in New York, the S&P500 ended flat, the Nasdaq lost 0.4%, and the Dow declined by 1%.

The S&P500 closed 0.8% higher on Friday, while the Dow surged some 570 points, led by big numbers for Salesforce and UnitedHealth.

The tech heavy Nasdaq ended same-same.

Investors were assessing the potential timing of Federal Reserve rate cuts, especially after PCE inflation figures aligned with expectations. In the corporate side, UnitedHealth shares rose 2.9%, and Salesforce rebounded 7.5% after a 20% drop the previous day due to missed revenue and sales growth targets, significantly boosting the Dow.

Gap soared 28.6% after its Q1 earnings beat estimates, and Nordstrom added 5% following decent quarterly sales data.

On the other side of the ledger and despite logging strong earnings, Dell Tech crashed 18% with traders leaping ship for sounder AI sailing after the firm revealed much lower-than-expected AI server backlog.

Bg ol’ Costco also backtracked near 1%, despite the mega food place reporting better-than-expected earnings and revenue.



The Week Ahead

Central bank meetings around the EU and Canada will be in the spotlight, while key data releases include US payrolls, mainland China’s trade data and worldwide PMI updates across countries and sectors.

GDP updates are also on the way from the EU, Brazil, South Africa and for wee Australia.

In the US, May non-farm payrolls and wage growth statistics are anticipated, with the market eager for signs of slowing jobs growth and softening wage pressures.

The Fair Work Commission is due to deliver its decision on Monday with a smaller rise most likely compared to last year.

It’s a decision which directly impacts around 21% of workers, all of which are feeling the COLC.


Globally, attention will be on the interest rate decisions from the European Central Bank, Bank of Canada, and Reserve Bank of India. Inflation rates will be released for Turkey, Indonesia, South Korea, Switzerland, the Philippines, and Mexico.

According to the latest May US flash PMI data, employment conditions were relatively subdued midway through the second quarter of the year. Traders will also closely monitor JOLTs Job Openings, ISM Manufacturing and Services PMIs, factory orders, and foreign trade data.

Given the angst all round regarding these ever, ever delayed Fed cuts, any macro messages pointing to easing wage pressures will be a red rag to the bulls.

Meanwhile, home price growth (Tuesday) is expected to have slowed in March and consumer confidence (also Tuesday) is likely to have fallen slightly.

In the EU there’s inflation data for May (Friday) and unemployment for April (Thursday).


US Futures on Sunday night:

Via Fox



The Economic Calendar

Monday June 3 – Friday June 7



AU CoreLogic Dwelling Prices, May
AU MI Inflation Gauge, May
JN Company Profits, Q1
CH Trade Balance, May
New Zealand
Thailand Market Holiday
Worldwide Manufacturing PMIs, incl. global PMI (May)
Indonesia Inflation (May)
Turkey Inflation (May)
United States ISM Manufacturing PMI (May)

ASEAN Manufacturing PMI (May)
South Korea Inflation (May)
Switzerland Inflation (May)
Germany Unemployment Rate (May)
South Africa GDP (Q1)
Brazil GDP (Q1)
United States Factory Orders (Apr)

Worldwide Services, Composite PMIs, inc. global PMI (May)
South Korea GDP (Q1, final)
Philippines Inflation (May)
Australia GDP (Q1)
Thailand Inflation (May)
France Industrial Production (Apr)
Brazil Industrial Production (Apr)
United States ADP Employment Change (May)
Canada BoC Interest Rate Decision
United States ISM Services PMI (May)

South Korea, Sweden Market Holiday
Australia Trade (Apr)
Switzerland Unemployment Rate (May)
Germany Factory Orders (Apr)
Taiwan Inflation (May)
Eurozone Retail Sales (Apr)
Eurozone ECB Interest Rate Decision
Eurozone Construction PMI (May)
United Kingdom Construction PMI (May)
United States Balance of Trade (Apr)
United States Initial Jobless Claims
Global Sector PMI (May)

China (Mainland) Trade (May)
India RBI Interest Rate Decision
Germany Trade and Industrial Production (Apr)
United Kingdom Halifax House Price Index (May)
France Balance of Trade (Apr)
Eurozone Employment Change (Q1, final)
Eurozone GDP (Q1, 3rd est.)
Mexico Inflation (May)
Canada Trade (Apr)
Canada Unemployment Rate (May)
United States Non-farm Payrolls, Unemployment Rate,
Average Hourly Earnings (May)