Job ads bounce
Job ads increased by +980 or +0.6 per cent in December 2019, thanks to a small bounce in New South Wales and Victoria.
The trend over the past year has been weak, however, especially in New South Wales (-14 per cent), taking national job ads -14,500 or -8 per cent lower.
Job advertisements in Sydney fell sharply by -17 per cent in 2019.
Over the calendar year of 2019 nationally there were double digit declines in advertisements for managers, sales workers, machinery operators, drivers, labourers, and clerical and administrative workers.
Technicians and trades advertisements were down -8 per cent.
Surveying the wreckage
Data elsewhere continued to disappoint, including plunging business and consumer confidence, and other surveys.
Data elsewhere continued to disappoint, including plunging business and consumer confidence, and other surveys.
As fears of a virus contagion also spread bond yields sank again to the lowest level of the year to date (if you aren't following Scutty as a premium source of markets information and insights, by the way, you should be!).
An interest rate cut is fully priced in for May, with a growing likelihood of a second cut later in the second half of the year.
Risk...ON
Stock prices have ballooned on the prospect of lower interest rates this year.
Stock prices have ballooned on the prospect of lower interest rates this year.
Even for bank stocks - which are apparently much hated - I've seen my Commonwealth Bank (ASX: CBA) shares soar from $68 to above $84 in double-quick time, despite no discernible improvement in the earnings outlook.
Fortescue Metals (ASX: FMG) has absolutely monstered higher to $12.69 on iron ore price strength, valuing the Fortescue group at just shy of a lazy $40 billion.
When FMG fell to $1.50 in 2016 some believed the company would collapse under its weighty debt load.
Now its apparently adding $1.50 the stock price across every few days of trade!
Momentum abounds
Woolies (ASX: WOW) has recovered well to hit a record high today, trading at a fiery PE of 36.4.
At a time when franchises have often been slammed Domino's Pizza is valued at $4.8 billion on an even more punchy PE of 41, while CSL has a fresh high share price of $308.50 for a PE of above 50 (!).
CSL is a strong and well-established company - arguably even a great company - with strong revenue and earnings growth prospects in the healthcare sector.
However, paying more than 50 times earnings with a dividend yield of 0.7 per cent is FOMO and price speculation writ large.
Growth stocks have utterly caught fire, with market darling stocks such as Afterpay (ASX: APT) having ten-bagged since 2017.
Even the mighty CSL has only ten-bagged since 2011!
Indeed, a lot of similar prospects have charts that look like the one below (in this instance, ZipCo, the bubble stock formerly known as Zip Money).
Aussie biotech stocks are a filthy bubble, and meanwhile on the NASDAQ...
When FMG fell to $1.50 in 2016 some believed the company would collapse under its weighty debt load.
Now its apparently adding $1.50 the stock price across every few days of trade!
Momentum abounds
Woolies (ASX: WOW) has recovered well to hit a record high today, trading at a fiery PE of 36.4.
At a time when franchises have often been slammed Domino's Pizza is valued at $4.8 billion on an even more punchy PE of 41, while CSL has a fresh high share price of $308.50 for a PE of above 50 (!).
CSL is a strong and well-established company - arguably even a great company - with strong revenue and earnings growth prospects in the healthcare sector.
However, paying more than 50 times earnings with a dividend yield of 0.7 per cent is FOMO and price speculation writ large.
Growth stocks have utterly caught fire, with market darling stocks such as Afterpay (ASX: APT) having ten-bagged since 2017.
Even the mighty CSL has only ten-bagged since 2011!
Indeed, a lot of similar prospects have charts that look like the one below (in this instance, ZipCo, the bubble stock formerly known as Zip Money).
Aussie biotech stocks are a filthy bubble, and meanwhile on the NASDAQ...
Tesla isn't far behind, ripping to $547 yesterday, from $177 in June.
Aussies do love a gamble, it's true, and these days our gambling knows no international boundaries, it seems!
The wrap
US stocks have boomed over the past 5 years, with almost no increase in corporate profits on the national accounts measure.
Interestingly, Aussie profits have surged since 2016 - but when you break it down the profits boost in Australia has really been driven by mining profits, closely mirroring the terms of trade boost to the quarter.
Not complaining, of course - this has been an Aussie wealth effect on steroids - but back at home all of this does make our ex-resources stocks amongst the most richly priced in the world now (at a time when stocks generally are richly priced).
Aussies do love a gamble, it's true, and these days our gambling knows no international boundaries, it seems!
The wrap
US stocks have boomed over the past 5 years, with almost no increase in corporate profits on the national accounts measure.
Interestingly, Aussie profits have surged since 2016 - but when you break it down the profits boost in Australia has really been driven by mining profits, closely mirroring the terms of trade boost to the quarter.
Not complaining, of course - this has been an Aussie wealth effect on steroids - but back at home all of this does make our ex-resources stocks amongst the most richly priced in the world now (at a time when stocks generally are richly priced).
