ANDIKA BULLETin 25 JAN 2024

European PMIs screamed stagflation overnight (weaker growth and rebounding prices) but US PMIs unexpectedly ripped (for all the wrong reasons - no longer lead-times are not a sign of demand outstripping supply, it's a sign of the shitshow in the Red Sea and storm-shutdowns in the US slamming supply chains).

Disruption-driven increases in supplier lead-times are not - I repeat not - a positive... After the debacle during the COVID lock-down supply-chain collapse (and soaring PMIs), you'd think they'd figured this shit out by now!!

But no one cared to look below the surface. That 'strength' sent rate-cut expectations (and the odds of a March rate-cut) reeling hawkishly lower to 36% chance of happening...

The US 5yr briefly broke below 4% but ended the session off the lows to finish at a yield of 4.08%

So the USD dived, and so did Gold. The higher yields hit US stocks broadly speaking but traders sought the safe-haven of mega-cap tech, enabling Nasdaq to close green. The S&P barely held on to gains as Small Caps lagged (and The Dow closed red)...

Bitcoin managed gains, but was unable to hold above USD$40,000...

However, Oil rallied up to one-month highs, breaking out of its YTD range...

Now normally I leave commentary on non-market matters to others. But I'd like provide my 2c worth on now modified Stage 3 Tax cuts and out national holiday - Australia Day.

Remember they are called Stage 3 tax cuts because we've already had Stage 1 & 2 cuts already delivered to lower and middle-income earners starting way back in 2019. Stage 3 left untouched would have delivered to middle and higher income earners.

They would have also significantly reduced the future impact of bracket creep by having a single 30c tax rate all the way from $45k to $200K.

Instead those between $135k to $190K will get hit 37c in the dollar and anyone over $190k gets hit at 45c in the dollar.

Sure Albo's changes slash the formerly proposed cuts to those over $200k but they will also slice deep for those earning between $135k and $200K. Let's not kid ourselves, the low end of that range - $135k these days is not exactly a high income.

Worse, those people who are around $80-100k who will increasingly move over time into the 37c bracket as against paying as they should under the original promise only 30c in the dollar.

PM Albo now has a severe credibility problem. Promising to keep something on like 100 times and then reneging means his word from today onwards means nothing.

Below is my 26 APR 2023 video on why the stage 3 personal tax cuts must be delivered as promised.

Now there will be no ANDIKA BULLETin for tomorrow as tomorrow is Australia Day and I'll be taking time out to relax and to pause on how fortunate I am to have been born and raised in what is probably still one of the best countries in the world.

Don't let those people who claim its "Invasion Day" affect you. The reason 26 JAN is celebrated is because The First Fleet of 11 ships, commanded by Captain Arthur Phillip, set up a convict settlement at Sydney Cove (now Circular Quay) on 26 January 1788. This was the beginning of convict settlement in Australia.

Captain Arthur Phillip wasn't ordered to invade or conquer. If anyone thinks 11 ships, of which just 2 were HMS Ships, constitutes an invasion force then I have a bridge in Sydney I want to sell you.

Captain Arthur Phillip's arrival began waves of convict transportation that lasted until 1868.

Sure The arrival of the First Fleet immediately affected the Aboriginal owners of the Sydney area - no one denies this - but I truly believe the arrival of the British over the French, the Spanish, the Portuguese and even the Dutch was the best possible of outcomes because whether the traditional owners liked it or not, some nation was always coming to settle and colonise these lands.

But tomorrow we celebrate out modern 21st century nation - a nation that has never seen a revolution or a civil war and may we never do.

Happy Australia Day!

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