31 Jan 2014
PM Abbott publicly attacked the ABC and said they should stick to straight news gathering. He stated that it appears as though the ABC instinctively takes everyone’s side but Australia’s….treason. The outburst followed their lead story on the alleged torture of asylum seekers by the Australian navy.
The Abbott government has signalled a broad ranging commission into the union movement following allegations of corruption in the construction industry. The commission is likely to look beyond just the construction industry, setting the scene for an attack on Labor’s support base.
The Federal Government has told struggling Australian industries they must renegotiate overly generous industrial relations deals to remain viable and not ask for government handouts.
The Federal Government denied SPC Ardmona’s (owned by Coca-Cola Amatil) request for a $25 million lifeline insisting that the restructuring some Australian businesses and sectors need is led by business with government assistance thereafter. PM Abbott indicated the importance that Coca-Cola Amatil completed its promised SPC restructure and renegotiated inefficient enterprise agreements.
Markets globally were hit with a wave of volatility this week as the sell-off continued in emerging markets due to concerns that the US central bank will accelerate its withdrawal of stimulus measures.
The Australian market had a relatively flat week after opening considerably lower on Tuesday (shortened week).
US and European stocks slid following the US central bank’s 2nd cut to stimulus, but then rallied higher following some strong company reporting (Facebook and Visa) and data showing the US economy grew at a solid pace in the last quarter of 2013.
In local news, ResMed, the sleep apnoea device company, announced record revenue and income for the December quarter. Their large US presence is benefiting from the increasing levels of obesity-related sleep issues.
JB Hi Fi reported a strong lift in first half net profit and sales, especially impressive was the increase in online sales (vs in-store sales).
It was reported that the Myer board had made an approach to merge with David Jones. David Jones turned down the offer, but it is now playing out in the press. Watch for further pressure on David Jones.
The Aussie dollar remained at 87 cents against the US dollar, with weak Chinese manufacturing data pushing it lower, before rising again later in the week.
Australia’s residential property market had a stellar year in 2013 – approvals hit a near record 200,000, prices lifted 10% on 2012, auction volumes spiked to a record, rental yields were maintained even with the significant price lift, and lending surged 26% on 2012.
In contrast, forecasts for property prices this year have already been revised lower to mid-single digits – the result of soft income and increasing unemployment, deteriorating affordability, and rising leverage.
National Australia Bank’s survey of business conditions revealed a significant improvement to the highest level in almost 3 years, but the conditions reading is still negative. Business confidence was unchanged.
Job advertisements on the internet fell in December, with a key index 11.1% lower than a year ago. The largest decline was seen for professional positions followed by labourers.
Recently released US housing data showed that existing home sales total 5.09 million in 2013, a 7 year high. The national median price for existing homes was up 9.9% on a year ago.
US new homes sales came in lower than expected in December, but were up 4.5% over the year. Sales for the entire year were at the highest level since 2008.
Turkey’s central bank more than doubled its benchmark interest rate from 4.5% to 10% in one swoop in order to defend the nation’s currency from falling further.