Mocker Monday. May 1.
Macro views
The anti-China sentiment, around business and trade, seems to be gaining momentum, fuelled by the coronavirus pandemic. There’s still alot of this to play out, but it seems the reversal of globalisation is looking like a major theme for the next few decades of investing.
- The Wuhan Coronavirus and Its Impact on China’s Foreign Relations – Part Two (Future Directions International)
- Australia could lose billions from Chinese government boycott threat (Sydney Morning Herald)
- Federal Government bans second Chinese mining investment after AVZ confirms lithium project to generate $6bn(smallcaps.com.au)
Alot of political and economic positioning going on behind the scenes. Time to fuel up the car. The Saudi-Russian oil price war explained (The Week)
The impacts of the pandemic are starting to come out. American downturn for the first quarter was 4.8%. Higher than initially expected (given that the shutdown only started in the last few weeks of it), and paints a bleaker picture for the next few quarters. U.S. Economy Shrinks at 4.8% Pace, Signaling Start of Recession (Bloomberg)
Covid-19 News Updates
Korea has announced their two-year “return to normal plan”, with track and trace, lots of testing, and new policy frameworks (e.g. work from home, social distancing guidelines for businesses). Post lockdown plan to beat coronavirus: More work from home, less eating out (live mint)
Australia is also slowly releasing it’s lockdown, though what this actually means varies from state to state. Coronavirus In Australia: Which States Are Easing Restrictions? (Huffington Post)
A key part of this is the COVIDSafe contact tracing app, which is being scrutinised by the IT community.
- Covidsafe app: how to download Australia’s coronavirus contact tracing app and how it works (The Guardian)
- Australia launches COVIDSafe contact tracing app (IT news)
Finally. What have you been eating during lockdown? Lots of Kitkat’s being sold in the last few months. Coronavirus: Nestlé delivers better than expected Q1 growth (Confectionery News)
Market News
Earlier this week NAB released their half yearly figures almost two weeks earlier than expected, alongside information about their institutional and retail capital raisings. A little gem in the report is that they are currently predicting a high chance of a V shaped recovery (87% chance, UBS). We’re not sure we’re that confident of that at the moment. Since then ANZ have also released their results, WBC will release next week, and CBA the week after.
- NAB Half year results investor presentation (NAB).
- NAB seeks $3.5b from investors, cuts dividend as profits drop 51 per cent amid coronavirus-hit economy (ABC News).
- News Release: ANZ NZ 2020 half-year result shows early impacts of Covid-19 (ANZ)
Part 2 of Montgomery’s analysis of FLT. There are still a lot of unknowns to where it will get to on it’s return, but their valuation has it fairly priced if it returns to half of its revenue by 2022, which seems like a fairly conservative estimate. After raising capital, is Flight Centre now a good investment? (Roger Montgomery).
A good analysis of Rio Tinto’s operations. Rio well placed to benefit from stimulus (Livewire Markets).
The last of the FAANGs has released their quarterly updates this week, in general they performed decently, with a mixture of beating or meeting expectations.