The week that was:
- Local and global equity markets weakened this week as central banks continued to hike rates in order to bring inflation control.
- US First Republic Bank went under with JPMorgan announcing it would buy most of the failed bank’s assets.
- More than 50% of the largest US listed companies have announced their March quarter results with earnings down but ahead of expectations. Almost 80% of results have come in above earnings expectations.
- In local stock news, Coles share price fell after the company reported third quarter group sales rose by 6.5% to $9.7 billion in the results for departing CEO Steven Cain. Woolworths also saw some downward pressure in their share price after the company announced third quarter group sales had risen 8% but food inflation remained a concern.
- Viva Energy completed its $300 million acquisition of the Coles Express 700-store convenience store chain from Coles Group. The families that own 750 7-Eleven stores around the country announced they are seeking to sell their private company.
- Qantas has named Vanessa Hudson as its new CEO and will assume the top job in November replacing Alan Joyce who steps down after almost 15 years in the job. Hudson is currently the airline’s CFO.
- A significant fall in the oil price this week as central banks continued to raise rates escalating fears of impending recession.
- The RBA raised rates by 0.25% at its May meeting bringing the cash rate up to 3.85%. The move came as a bit of a shock for most given expectations were for another pause.
- The US Treasury secretary said the US government may hit the debt ceiling sooner than expected. With no agreement in sight, Republicans controlling the lower house and Democrats the upper house, and President Biden vowing to veto any cuts to expenditures, a technical default is real possibility this time around.
- The UK government has said it will break its pledge to remove around 4,000 laws from Britain’s membership of the European Union by the end of year deadline. Instead, a smaller number of laws will be removed.
- France’s constitutional council rejected a second attempt to hold a referendum on President Macron’s unpopular decision to raise the retirement age to 64
Robert Coyte – Shartru Wealth