ANZ jobs ads up by a record 42pc in June

Job ads bounce at last

Job ads jumped by a record +42 per cent in June 2020, dwarfing the previous record increase of +18 per cent back in early 2010. 

It can be all too easy to be fooled by nerds bearing statistics, though - especially when it comes to sequencing! - and thus it's important to remember that job ads are still -45 per cent lower than a year earlier.

The apparently massive +42 per cent increase is much easier to visualise in a chart:

A seasonally adjusted 89,000 ads is much better than 63,000, for sure, but it's also way down from the cyclical peak of 183,000 in mid-2018. 

The good news is that this may mean the unemployment rate goes little higher than the current 7.1 per cent in this cycle...maybe! 

SEEK's figures showed that hiring activity in hospitality and tourism is now on the increase, which is heartening news. 

COVID outbreak

Total employment has fallen from around 13 million to 12 million this year, so after accounting for changes in the participation rate there has been a dramatic impact which will take time to recover from.

This looks especially likely to be the case in Victoria, where all of a sudden there are some 645 active cases of COVID-19, with today representing the worst 24 hours on record for the state. 

All other states and territories have seen zero community transmission cases this week, with only a few returning travellers testing positive in quarantine.

But Victoria has sustained a number of different outbreaks, at abattoirs and elsewhere, albeit from a very high level of testing now, and New South Wales has accordingly closed its borders to Victorians.

There are four Victorian cases in ICU, and there have been 22 deaths in total since the beginning of the year.

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Elsewhere I've been commissioned to do some work on the impact of the September fiscal cliff and the end of repayment holidays for residential mortgages and other commercial loans. 

There's not much room on a personal daily blog for detailed findings, but I might be able to post a few bits and pieces here. 

Podcast Episode #13: Individual decision making

Better decision-making

In this episode we discuss the pitfalls of individual decision-making.

Tune in here or click on the image below:

You can check out our full series at Apple podcasts, or you can tune in at Soundcloud, Stitcher, or Spotify.

Don't forget to leave us a friendly review, as it helps us to get the word out. 

Thanks! :-)

A bit different this time?

Nosebleed valuations

The Crestmont P/E is still levitating 119 per cent above its arithmetic mean, and remains close to the highest level in history at 33. 

During the tech bubble/bust the Crestmont P/E rose above 25 (denoting 'irrational exuberance') and momentarily touched the current record high of 33.7 before promptly crashing.

In 1929 ahead of the Wall Street Crash and the Great Depression the Crestmont P/E peaked at 26.4.

And before the subprime financial crisis it peaked at 24.7.

Here's the chart update until today:

Source: Advisor Perspectives

Earnings reports will be interesting to follow this year given that there's been a severe disruption to global economic activity in 2020. 

Back in Australia earnings expectations have been revised dramatically lower, for five sectors in particular:

Source: Morgan Stanley

Markets are forward-looking of course, but this puts PE valuations for the ASX 200 at extremely lofty levels. 

Source: Morgan Stanley

This would not be a good time to disappoint markets with an earnings miss, you'd think.

Podcast Episode #13 preview: Devil Take the Hindmost

Devil take the Hindmost

Episode 13 of our Low Rates High Returns podcast is entitled Devil Take the Hindmost.

The next episode will be out on Monday morning, but here's an audiogram preview below:

You can check out our full series at Apple podcasts, or you can tune in at Soundcloud, Stitcher, or Spotify.

Don't forget to leave us a friendly review, as it helps us to get the word out. 

Cheers! 

Top of the charts

BIP Show

Bit of a turn-up, with The BIP Show topping the Apple podcast charts for investing (and close enough for business too):

Tune in here to listen (or click on the image below):

Tesla to the moon!

Tesla takes the lead

Tesla's Q2 delivery numbers beat the street expectations at 90,650.

The stock price soared a further 8 per cent to an all-time high close of $1,209.

Tesla is now the highest valued carmarker on the planet ahead of Toyota and all the rest, even before it's consistently turned a profit, with a market cap of more than $224 billion.

The major car manufacturers saw sales plunge more than 30 per cent as the recession and shutdowns disrupted activity. 

American recovery begins. However...

Unemployment falling again

The official US unemployment rate had been reported at 14.7 per cent in April.

In more promising news the BLS reported that the unemployment rate declined to 11.1 per cent in June. 

Having previously shed a horrendous -22 million jobs the economy added +4.8 million in June, following on from the upwardly revised +2.7 million added in May. 

The participation rate bounced by +0.7 per cent to 61.5 per cent, but remains -1.9 per cent below the February level. 

The next long recovery has begun.

However, jobless claims remain very high, while new virus cases have leapt to above an alarming 50,000 per day.

With the Coronavirus now having spiraled totally out of control the US potentially faces rolling shutdowns which will likely stymie the recovery.

The huge monthly bounces in payrolls of May and June are not expected to be repeated in the second half of 2020, in a line with the concept of a 'square root' shaped economic recovery. 

The US election campaign looms. 

Aussie dollars staying at home

Border patrol

Tourism debits have fallen by an astounding -99 per cent in 2020, as the closed borders precluded most Aussies from travelling overseas. 

That's a lot of Aussie dollars staying at home and one of the factors that's keep the dollar stronger than might've been expected. 

Iron ore exports have benefited hugely from Brazil's woes, and another $9bn of exports kept the value of ore shipped tracking at record highs.

Coal and services exports are sliding, though, so although exports are holding up better than they did through the GFC values were down another -4 per cent in May, and have slipped to $35.7 billion from $42.1 billion in March. 

Imports fell from $31.7 billion back in March to $27.7 billion in May, following another -6 per cent drop in the month. 

Imports are now down by a thumping -23 per cent this year. 

The cumulative trade surplus for the past three months is accordingly a record high of A$26.2 billion. 

Australia is in a strong position given its management of COVID-19 but is desperate to see foreign dollars gracing these shores again. 

The Australian Prime Minister confirmed today that he's considering offering safe haven visas to Hong Kong residents after the UK PM said they'd open the borders to more than 3 million Hong Kongers if they wanted to leave the country following the recent wave of protests.