Home / In Practice / Financial Planner morning report Friday

Financial Planner morning report Friday

Here's what financial planners need to know Friday morning. The ASX 200 followed Wall Street’s lead down on Thursday, falling 1.7% and finishing at just 5.319 points.
In Practice

Here’s what financial planners need to know Friday morning.

Data continues to worsen

The ASX 200 followed Wall Street’s lead down on Thursday, falling 1.7% and finishing at just 5.319 points. The first of Australia’s weak economic data was released showing unemployment had spiked to 6.2% from 5.2%, with some 600,000 people losing their jobs in the quarter.

Unfortunately, a falling participation rate and the Job Keeper payment is hiding the likely closer to 11% unemployment figure based on the views of most economists.

  • The news wasn’t much better in the US after another 2.98 million people claimed unemployment benefits in the week prior. Even amid this negative backdrop the S&P 500 managed to break three consecutive down days to improve 1.2% at the close as the likes of McDonald’s (NYSE: MCD) rolled out their phased reopening handbooks.

    The beginning of MMT

    In signs that the increasingly popular Modern Monetary Theory or MMT policy may be suited to this difficult environment, the Australian Government easily managed to sell $38 billion worth of 10.5-year bonds on Thursday.

    Increasing rhetoric from China regarding our trade relationship, including the banning of certain meat exports this week, is placing diplomatic stress at a time when our exports are as valuable as ever (of which 33% go to China). There is little doubt that the economy will need as much support as it can get for as long as possible to stave of depression-era unemployment conditions.

    It’s all about tech

    Proof that the resilience of technology companies do in fact travel came as China’s tech heavyweight Tencent (HK: 0700) provided its quarterly update. The company, which owns the Fortnite video game franchise, Weixin Pay, the largest online payment processor in China; and more recently 5% of Afterpay (ASX: APT), beat expectations.

    Tencent’s gaming sales improved 31% as the world was stuck at home, offsetting weakness in advertising revenue, with total revenue up 26% to $15.2 billion for the quarter.

    Back home and Amcor (ASX: AMC) announced they expect earnings per share growth to improve for the financial year, benefitting from the defensive attributes of packaging the most hoarded products. However, management suggested weaker results in FY20-21 as consumption slows.

    The biggest surprise for me came from Graincorp (ASX: GNC), which reported a $388 million profit following the demerger of its United Malts (UMG) business, getting growth from all business units. Interestingly, the latter business launched an unexpected equity capital raising just a few months after becoming its own business.

    This report was written by Drew Meredith, Financial Adviser and Director of Wattle Partners.

    Print Article

    Higher inflation, recession more likely: Franklin Templeton

    Late July news of the Federal Reserve (Fed) increasing interest rates another 0.75% and a second negative quarter of economic growth (GDP) has created an uncertain environment for investors going forward. Adding to these concerns is China’s economic slowdown and Europe’s energy shock.  Stephen Dover, Chief Market Strategist, at the Franklin Templeton Investment Institute presents…

    Stephen Dover | 15th Aug 2022 | More
    Jones looks to shorten exam, improve ethics code

    Once the advice review is completed, the minister has asked Treasury to look at updating the ethics code and assessing the viability of a shortened adviser exam.

    Tahn Sharpe | 15th Aug 2022 | More
    AZ NGA dives into supply chain with Virtual Business Partners tie-up

    The Italian-backed group has teamed up with one of AMP’s largest advice businesses to take a major stake in the back-office services provider. It’s the first time AZ NGA has ventured beyond advice and accounting investment.

    Tahn Sharpe | 15th Aug 2022 | More
    Advisers urged to tread carefully with ‘wholesale investor’ status
    Staff Writer | 28th Jul 2022 | More
    Top hedge fund award goes to L1 Capital
    Greg Bright | 13th Dec 2021 | More
    MAX Award winners and the new world outside
    Greg Bright | 13th Jun 2022 | More
    INDepth with Andrew Lockhart from Metrics Credit Partners
    The Inside Adviser | 30th Jun 2022 | More