5 May 2024
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1. Aussie dollar spikes to 67 cents
Another great day for stocks is predicted as the Oz dollar spikes to 67 US cents. In fact, the dollar is up 8% in a month and our stock market has risen 11% in six weeks and these are all big rises. Why the flip around in sentiment to the positive? You can thank signs that US inflation is falling and interest rates there are close to topping out. Our share market is tipped to open 42 points higher today.
2. Good news out of China
Stocks are being helped by good news out of China that could help the RBA reduce interest rate rises. China’s zero-COVID policy has put a brake on world economic growth and Australia as a big exporter to the world needs a faster growing China not held back by lockdowns. So the stock market has also been helped by the news that China’s local governments no longer have to track secondary close contacts, and international arrivals in China will be reduced from seven to five days’ quarantine. When China gets back to normal, higher costs because of lockdowns — powering inflation — will fall and that could slow down the RBA’s need to raise interest rates.
3. Positive or negative for stocks?
| CNBC explains that “the stock market’s rally after October’s inflation report will be tested this week, as investors watch a flurry of Federal Reserve speakers, as well as major retailers’ earnings for a look at how consumers are dealing with inflation. On the geopolitical front, any progress from a meeting in Indonesia Monday between President Joe Biden and China President Xi Jinping could be positive for market sentiment. It could also be negative at a time when there has to be a lot of professional profit-takers out there. |
4. No punishment yet for Medibank officials
Medibank’s directors and executives won’t face a pay cut for the hacking drama. The SMH says “key investors are warning Medibank Private’s executives and the board they will be held accountable for the catastrophic cyberattack which exposed [9.7 million] customers’ personal details, but the private health insurer’s top managers won’t face a pay cut at this year’s annual meeting. That said, directors and executives could eventually be sacked and past bonuses could be clawed back.
5. Will Cannon-Brookes win at AGL?
The Australian says yes, with all four candidates he put forward to join the power giant’s board looking likely to get the nod. “Ahead of AGL’s annual general meeting on Tuesday, sources said the businessman was likely to prevail in the battle against chair Patricia McKenzie with the quartet of Mark Twidell, Kerry Schott, Christine Holman and John Pollaers joining as new directors.” Only Mr Twidell had been endorsed by AGL, with the three others rejected due to a lack of experience and skills to implement its strategy. Wednesday’s AGM is expected to hear questions from shareholders “…over the board’s rejection of two takeover bids by Mr Cannon-Brookes and Brookfield in February at $8.25 a share and $7.50 respectively.” The current share price is $7.81.
