Everything worth knowing in less than a minute…
Rate Cuts are on!
There was enough weak news in the week to give the RBA the nudge it needs to cut further this year, especially with APRA pulling the banks into line. Credit growth is modest, and investment is failing to lift. Look for at least one or two more this year I reckon.
Credit Data says, “What bubble??”
Credit data were out for April, showing a pick up in housing credit, offsetting a slight fall in business credit. But look at it in over the long-run, and you wonder what all the bubble blowers are going on about… Credit growth remains modest and very sensible.
Over the mining cliff we go…
The big news for the week was CapEx (business investment), and it certainly wasn’t good news. CapEx fell again in the March quarter and in trend terms, has fallen for 11 straight quarters, something we haven’t seen since the early 1990s recession.
Transition keeps slipping…
Of course the fall in CapEx is all about mining, which we all knew was coming, but we’re not seeing other sectors of the economy pick up the slack.
Mining States doing it tough
Construction work done fell most in previous mining boom states, QLD and WA.
But home building was a bright spot
Through it all, residential construction continues to lift, with a focus on multi-unit construction.
And if you build it, someone will sell it…
New Home sales posted their fourth consecutive gain in April, and are up 5% over the past 3 months, though again it’s driven by multi-units, which are up almost 60% over the year!
… probably to someone in China!
New Data shows just how big the Chinese spending spree in Australia has become, with investment in a combined Sydney and Melbourne eclipsing New York and London. Not bad when you think about the relative populations.
… Because China just has too much money.
China has entered it’s own QE (money printing era) and all the signs are there. The stock market has completely departed from actual levels of activity…
and there’s a tech bubble that makes the dot-com bubble look like a walk in the park.
Think about the wall of money that could be headed our way if stocks go out of fashion!
Have a great week