Few would disagree that a strong regulator is required for a strong superannuation system. But APRA’s myopic focus on cost to members means its $70,000 Christmas party is unlikely to help its reputation.
Good investing requires real sacrifices, according to Oaktree’s Howard Marks, but you can’t expect to be compensated just for making them.
ASX drops to three week low, coal tumble continues, staples outperform
The local market dropped 0.8 per cent on Friday, taking the weekly loss to 1.7 per cent and the lowest level for three weeks. The biggest driver was a heavy retreat in coal stocks after thermal coal prices fell by more than 5 per cent, taking the price per tonne down 50 per cent from the peak in 2021. New Hope Coal (ASX:NHC) fell 8.6 per cent and Whitehaven (ASX:WHC) 3.7 per cent on the news. It was a similar story for News Corp (ASX:NWS) which dropped 6.9 per cent after reporting a 30 per cent fall in earnings after revenue in the publishing and real estate businesses fell by 7 per cent. Dow Jones remains the standout, growing revenue by 11 per cent, but the investment in REA Group (ASX:REA) was also hit as real estate listings fell by more than 30 per cent in Sydney and Melbourne in the quarter. Over the week, the property sector was the biggest detractor following the RBA’s latest rate hike, falling 5.7 per cent, while materials were the best performing, down 0.7 per cent after Newcrest (ASX:NCM) surged by more than 10 per cent after receiving a takeover offer.
US markets mixed, Expedia sinks, Disney flat despite upgrade, consumer sentiment bounces
US markets improved on Friday, with the Dow Jones and S&P500 gaining 0.5 and 0.2 per cent respectively on the back of a stronger consumer discretionary sector. The Nasdaq fell 0.6 per cent as more stern words around inflation send bond yields higher. Consumer sentiment hit a 13-month high in the US, as signs of a peak in inflation filter through the economy and into consumer psyches. Despite this, shares in Expedia (NYSE:EXPE) fell by more than 8 per cent after the company reported a more than halving in profit for the quarter, despite a 15 per cent increase in revenue. Bookings increased 17 per cent but growing costs are having an outsized impact on margins. New (but old) Disney (NYSE:DIS) CEO delivered some positive news for shareholders, announcing 7,000 job cuts and a US$5.5 billion cost cutting crusade, centred around bringing the business back to stronger profitability. The business will be split into three more appropriate divisions and a focus on more efficient business management will be key. Across the week all three benchmarks fell, the Dow down 0.2, the S&P500 1.1 and the Nasdaq 2.4 per cent.
Don’t look now, rates hitting listings, top or bottom of the cycle?
Don’t look now, but amid all the doom and gloom that one could imagine around inflation, interest rates and recession, sharemarkets are having somewhat of a renaissance. The Nasdaq is now more than 12 per cent higher since 1 January, while Ark’s Innovation ETF (NYSE:ARKK) has gained more than 28 per cent. Similarly, after being written off, Tesla (NYSE:TSLA) are now more than 82 per cent higher in just 7 short weeks, offering a reminder that we should never extrapolate recent events. The naivety that property would not be impacted by rate hikes is now fully on show with property prices already having fallen by more than 10 per cent, but more importantly real estate listings in Australia’s major capital cities are both down more than 30 per cent in the latest quarter. Coal miners and material companies have been among the most popular in 2023 after delivering bumper returns in 2022, but with coal prices having hit half their 2022 peaks, those entering the sector now must be incredibly wary, or confident.
