PM urges calm; ASX best day in a year on peace hopes; the great KitKat heist

PM urges calm; ASX best day in a year on peace hopes; the great KitKat heist

News in brief

The local sharemarket went on a tear yesterday, kicking off the new quarter up 2.2 per cent following a strong lead in from Wall Street after comments from US President Donald Trump that the Middle East war would be over in weeks.

 

The supply of housing across the country is rising, with building approvals jump 30 per cent in February, thanks to a surge in units. Figures for units are notoriously volatile, and so if you look at the trend, which Sean is our friend, building approvals are rising steadily.

 

The boss of Anthropic, one of the leading AI companies in the world, was in Canberra yesterday, visiting Prime Minister Anthony Albanese and Industry Minister Tim Ayres. Dario Amodei signed a memorandum of understanding in which Anthropic pledged to support the government’s framework on data centres and AI markers.

 

The world’s most populous nation, India, has just kicked off a nationwide Census of its 1.4 billion people, hoping to count every person in the nation, over a 12 month time frame. It is the first population count in more than 15 years.

 

Approximately 12 tonnes of KitKat chocolate bars, stylised as Formula 1 cars, have been stolen while transiting through Europe. A truck carrying 413,793 units of KitKat’s “new chocolate range,” has disappeared, having left central Italy on a 1,300km journey to Poland.

Fear-o-meter

The PM in a national address – just the third in 18 years - calls for calm. The local share market jumps 2.25 per cent, adding $68 billion in value, having lost eight per cent in March. US President Donald Trump says the war will be over in two or three weeks and he doesn’t care if the Strait of Hormuz is open or closed. Iran says it isn’t negotiating with the US though it does have the “necessary will” to end the war. And that’s just the last 36 hours.

 

Making sense of what is going on geopolitically and economically is very, very difficult. Markets are moving on headlines that flip-flip not day-to-day, but in some cases, hour-by-hour.

 

What do we know? There is a fuel crisis in Australia and prices will remain high for months. Interest rates are likely to rise in May as the Reserve Bank clamps down on inflation expectations. The local economy is slowing and might go backwards during this quarter. And the federal government’s plans to cut the budget deficit are in trouble, following the reduction of the fuel excise.

 

Leaving aside the headlines, this is not a good time for the Australian economy. The cost-of-living pressures remain and it’s going to get worse. For investors and businesses, it’s a good time to take stock.

Fear & Greed Q+A today

On executive pay in Australia, and why it comes back to one thing - whether pay matches performance:

 

“The reality is that executive pay is a construct. Most Australians probably have a fairly abstract understanding of it, but the reality is that it still impacts everyday Aussies.

 

If you look at the retirement balances — the superannuation balances of most Australians — they have a strong weighting and investment in global and local equities. And when you think about the structure of executive pay, a significant portion of that is in equity.

 

So when you see a number reported in the press or executives realise a pay outcome, the tall poppy inside all of us has an initial negative reaction. But the context there is important — if a company has delivered sustainable share price and stakeholder returns over a long period of time, that usually means Australians have benefited as well through their superannuation balances.”

Prime Minister Anthony Albanese last night appealed to the nation to do their bit in conserving petrol and diesel, but stopped short of suggesting fuel rationing is on the way. In a five-minute address broadcast on all networks, Mr Albanese made it clear he will be the primary voice during the energy crisis, unlike COVID when the different state leaders took over, and he sought to calm fears about running out of petrol. He said the months ahead would not be easy but people should go about their business as usual, including following through with their Easter plans. It's not often that the PM addresses the nation - Kevin Rudd did it during the GFC, and Scott Morrison at the start of the pandemic - and while the speech was light on new information, the goal was likely to project a sense that the government is in control of the fuel crisis.

Greed-o-meter

City	Avg Price ($/L)	Fall (¢/L)
Sydney	2.44	13
Melbourne	2.43	16
Brisbane	2.44	15
Adelaide	2.34	25
Perth	2.44	7
Hobart	2.39	18

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Petrol prices fell yesterday as petrol stations started passing on the government's excise cut.

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Source: NRMA, fuelprice.io