New virus cases continue their decline

Curve flattens

Australia has rattled through some 70,000 Coronavirus tests over the past week, lifting our per capita testing rate to the top the tree from a global perspective.

And here's a turn-up for the books: another sharp drop in new COVID-19 cases today.

When the final numbers are in this will be the lowest number of new cases since all the way back on March 21.

Update: 222 cases in total today, which is by far the lowest result in 12 days.

The Prime Minister stressed that we're still in the 'suppression phase' and that a tight rein will be kept on social distancing and movements in society.

PM Morrison also noted that people should expect the issue to be with us for six months, and prepare that we should prepare accordingly on that basis. 

But it's been a positive week, with new known case numbers faring far better than expected.

If the same happens over the coming fortnight then there'll be a growing clamour for businesses to be allowed to re-open.

But let's not jump the gun on that. 

Stay home, stay safe, and have a great weekend! 

Jobless claims point to deep US recession

US jobless claims through the roof

US initial jobless claims spiked to a horrendous 6.65 million this week.

The previous reading was also revised up to 3.3 million, taking the total to 10 million for the previous two prints.

It's by far the biggest spike in history, and cases of COVID-19 continue to spread widely across America, and viciously so in New York.

Source: Joiner, IFM

Markets news

Dividends are set to be slashed by an enormous margin over the year ahead, and bank dividends won't be immune from the cull.

In oil news, President Trump claimed to have brokered a deal between the Saudis and Russia to reduce the high levels of oil production.

I wouldn't believe most of what Trump tweets, but regardless of this the price of oil spiked by +25 per cent for the greatest daily price gain in history.

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Early indicators suggest that there will be fewer than 250 new cases of COVID-19 in Australia, for the lowest figure in two weeks.

Let's hope this early projection holds!

New cases fall

New COVID-19 cases in daily decline

Australia rattled through another 9,136 tests for COVID-19 today.

And - some good news - new cases fell back to 272 as today now draws to a close. 

There have been some cases of local transmission in New South Wales and Victoria, and there's been a troubling cluster of health worker cases in the Kimberley. 

Here are the overall statistics for today:

No exponential growth yet to be seen here.

In fact, 272 cases is just about as good as we've seen in the 12 days since March 21.

There is to be no let-up in the incremental tightening of shutdown measures, however, with New South Wales now putting in place highly stringent restrictions which may yet remain in effect until the end of the financial year. 

Social distancing continues to work in Italy, Spain, and Germany, offering hope that Australia can arrest the spread of COVID-19 much sooner.

But with Florida desperately slow to react and act, and holiday-makers having travelled so freely around America, the outlook for the US now looks particularly grim.

Job vacancies get set for a plunge

Vacancies set to fall

Job vacancies had barely begin their decline by the end of February, holding up at about 227,000.

Vacancies were lower than a year earlier due to the bushfires, but not by much.

There were about 700,000 unemployed persons at the end of the last month, so there never was any tight labour market in this cycle. 

We simply never got low or tight enough to see stronger wages growth. 

And full employment has remained elusive throughout the full cycle.

Looking at the most timely available data from private data sets on job vacancies and other reads, it seems likely that unemployment is probably heading to about 10 per cent, although the situation is very fluid right now. 

At the state level, the resources states were tracking a bit better, as Sydney and Melbourne have moved beyond their respective peaks. 

Challenging times ahead.

Recency bias (and sticking to the principles)

Recency bias

The RBNZ today ordered banks to stop paying dividends back to their Aussie parents.

The UK seems to be going down a similar path, with banks expected to share the pain of the COVID-19 recession.

The Aussie major banks immediately dropped more than 5 per cent on today's open due to the cautionary news.

Commonwealth Bank was down more than 6 per cent in early trade, and trading with a $59-handle. 

As we discussed only yesterday, dividends will be slashed over the year ahead, so you need to be well prepared for that. 

A short and sharp post today, then, on sticking to your principles.

See here for more (or click on the image below):

Virus update

Fewer new cases

There were 301 new known cases of COVID-19 in Australia today, which is a lower figure than yesterday (with Tassie still to report).

Australia has now run some 75,000 tests over the past week - with 2 to 3 per cent testing positive on most days - and to date there have been 21 deaths. 

Community infections are now starting to show up in the figures, including a cluster of 13 known cases from Adelaide Airport.

But overall there's been no exponential increase in evidence for the past 10 days in Australia, which is promising.

This is in spite of reports than in some parts of the country folks still aren't taking the restrictions seriously enough.  

And on the log scale chart the curve has been flattening out for Australia (the red line highlighted below) and New Zealand.

Italy is also now seeing falling new cases, after its explosion.

Melbourne unit approvals rebound

Jump in Melbourne units

Melbourne saw 3,547 attached dwellings approved in February 2020, which was the highest monthly result for the Victorian capital since November 2017.

Elsewhere it's more a case of 'as you were' as dwelling approvals continued to tighten. 

House approvals also continued to decline in Sydney, while Melbourne experienced a bounce here too.

Overall, dwelling approvals rebounded by 20 per cent to 15,700 in the month of February, exclusively driven by activity in Victoria.

Attached dwelling approvals jumped 62 per cent, from a very low base. 

Many of these approvals will now be mothballed, and the downtrend will resume in next month's figures regardless. 

Housing values continued to rise in March (CoreLogic)

Slowdown arrives

Early in March housing market activity was running hot, giving rise to further price gains over the month.

However, transactions were stalling by the latter half of the month as open homes and auctions are no long permissible due to restrictive COVID-19 regulations.

The +0.7 per cent increase was already the slowest growth for a year.

Sydney led the quarterly gains with an increase of +3.9 per cent.

Source: CoreLogic

The full report from CoreLogic is here.