This last week was marked by a rally on the Suncorp share price, illustrating the impact of “Investors Relations” as it is explained by Capital Group buying the stock after they “studied” it for a few months. IAG is contemplating repricing of its insurance premia. Whilst NAB and BoQ are facing challenges on the boardroom front.
It was a big week on the Australian macroeconomics front: the slump in prices of mining exports has cut national income at the fastest pace since the GFC or the 1990s recession. Real GDP, which measures the amount of goods and services produced in the economy, grew 0.5% in the 3 months to 30 Sept, the smallest gain in 6 quarters. Real Gross Domestic Income – the purchasing power of what the economy produces – fell 0.4% in the quarter: the terms of trade, was pushed down by lower prices for iron ore, coal, and other commodities. Excluding the worse of 2009, income fell for the first time in annual terms since late 1991: an important figure because nominal growth determines wages and tax revenue. As result the RBA cut the cash rate cut by 0.25% to 3% (back to GFC levels): causing observers to revive the “new normal” phrase to describe those conditions.
The other break news of the weekend is coming from Europe: Italian PM Mario Monti announced he will resign, whilst Berlusconi declared he intends to re-enter politics, which will no doubt keep inspiring the press as illustrated by today’s Libération’s front page “The Return Of The Mummy” (pic below), and will keep testing the nerves and sense of humour of the true believers in democracy as an effective system to contain populism and fix ze world…
No snapshot this week but we’ll examine the “new normal” in Australia, and the way events are unfolding globally in the next radars.
As per usual: Links curated in pearltrees http://pear.ly/bQMjz