Weekly Brief Sheet - 06/06/22

Updated: Jun 6

Provides a market round up, a selection of useful data points we use for our investment analysis, and some interesting articles/charts we have noticed recently.



Last week, US stocks gave up some of the strong gains from the previous week as investors questioned whether the Federal Reserve would be able to rein in inflation without causing a recession. The industrials sector outperformed, helped by a rise in Boeing. Consumer discretionary shares also fared well, boosted by Amazon.com.


The week was characterized by JPMorgan Chase CEO Jamie Dimon's warning that an economic "hurricane" was on the way, which might have contributed to the volatility. Still, the VIX index, which measures expected volatility in the S&P 500, ended the week below 25 for the first time since mid-May.


The local share market has posted gains as China's economic hub of Shanghai reopens following two months of COVID-19 lockdowns. The benchmark S&P/ASX200 index closed Friday up 62.9 points to 7,238.8, a gain of 0.88 percent. It was the market's third week of gains.


Every sector was up on Friday except for telecommunications, which was flat, and consumer discretionary shares, which dipped slightly. Given that China is Australia's largest trading partner, the reopening of Shanghai is seen as a positive sign for the Australian economy. Investors are also hopeful that further stimulus measures from the Australian government will help to boost the economy in the months ahead.


Origin Energy this week withdrew its earnings guidance for the year to June 2023, as the company struggles to secure coal for a key power plant amid soaring spot energy prices.

Origin's shares dropped 15% after the announcement. Origin's problems reflect the extreme volatility in Australia's energy market, which has been fueled by soaring global coal and gas prices in the wake of the Ukraine conflict and outages at local coal-fired power plants.


Origin has faced difficulties obtaining coal for its Eraring power station, the country's largest coal-fired plant, from Centennial, its supplier. Origin is not the only company facing challenges in Australia's energy market - other companies have also been struggling to secure coal and gas supplies. The extreme volatility in the energy market is likely to continue in the short term, as global prices for coal and gas remain high.


Three things were in shorter supply than usual at this week’s World Economic Forum in Davos: snow, delegates, and reasons to be cheerful. The confab of politicians, financiers, business leaders, and hangers-on reconvened in the Swiss mountain resort after a pandemic-induced absence of more than two years.


The consensus that emerged is that the world is beset by problems, many of which are going to get worse.


The best hope is that the unreliable prognosticator known as “Davos Man” has got it wrong once again. For the uninitiated, Davos Man is the term coined by British author and journalist Ferdinand Mount to describe the kind of globetrotting elites who descend on Davos each year to network, schmooze, and pontificate about the state of the world.


This year’s crop of Davos Men (and a few women) did not disappoint, offering up a veritable smorgasbord of doom and gloom. Climate change, rising inequality, populism, nationalism, cybercrime – you name it, they’re worried about it.


Links:

Car tyres produce vastly more particle pollution than exhausts, tests show

The workers getting 100% pay for 80% of the hours

How the heritability of politics works?

Antitrust vs. ESG

 

Misc. Topical Charts:





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