Welcome back to our weekend reading.
Reporting season is underway across a few different markets, and we are already seeing the volatile reactions to mild earnings misses or announcements of off market share buybacks. There has been news that impacts the future of mankind, and news that makes you question the future of mankind.
On a side note, the ACT has gone into lockdown this week, with all non-essential services being closed. Which has included Parliament. Good to know that we don’t consider our elected politicians as essential.
Let’s look back on the week.
Bringing SPACs Back
It’s been a while, but remember SPACs?
They are still around but have garnered less media attention of late, though that may change with the potential $1.8 billion USD deal between Tim Hortons China and Silver Crest Acquisition Corp.
If you’re unfamiliar with Tim Hortons, there are probably more Tim Hortons stores littered throughout Canada than there are human beings in that country. Without exaggeration, if you have a solid enough golf swing you could probably hit three Tim Hortons with a ball from your roof if you live in the outer suburbs of Toronto. Okay maybe a little exaggeration, but they are a prolific national icon, with comparable market saturation to McDonalds anywhere else.
Although little known elsewhere around the world, Tim Hortons appears to be eyeing the market share Starbucks have established in mainland Chinese cities, with over 150 stores in 10 cities and looking to expand that figure 10-fold following this proposed merger.
I hope those are cold cities, because literally dying of hypothermia was the only reason I could ever see to ordering the “microwave minestrone in a Styrofoam cup” special when visiting Canada.
Better Late Than Never?
A protest in the UK gained attention this week for storming the headquarters of major broadcaster BBC… around four years after BBC had moved out of that building.
Protesting a range of issues from mainstream media to promotion of COVID-19 vaccines in the UK, a small group of protesters from the crowd managed to gain access to the Television Centre building in London, only to find it was fitted out with ITV sets, on which those breakfast shows (which I assume are just generated by an AI) these days are filmed.
Very much a “should have done your own research” moment.
U.S. job openings reached a new record high in June this year, almost doubling levels seen throughout 2018 to reach 10.1 million available positions. As a reminder, the national unemployment rate in July 2021 was 5.4%, as a comparison to this figure.
The 10.1 million surprised to the upside, spiking up from 9.5 million upwardly revised in May. There are ongoing stories about labour shortages in consumer services and unskilled labour from the U.S., albeit much of this is anecdotal and there is certain to be geographic discrepancies.
Interestingly, the quits rate rose to 2.7% in June, driven by 3.9 million people voluntarily leaving their jobs, in similar industries to those which saw increases in openings of course (retail services, retail trade, hospitality).
Here’s another quick chart from Bank of America, showing that the U.S. small business sector is “reporting the most difficult time to find workers in 50 years”:
*All numbers in USD from BofA Securities
Equities: $15.7bn into equities
Bonds: $10.1bn into bonds
Precious Metals: $0.049bn into gold
Cash: $8.5bn into cash
Flows to Know
Week of rotation back into “value”
Largest inflows to financials in 10 weeks ($1.5bn)
Smallest inflow to tech in 7 weeks ($0.4bn)
Largest outflow out of EM debt funds in 7 weeks ($0.3bn)
6-month annualised core CPI rate
Cost of shipping goods from China continues to rise
Small businesses to raise pay highest since 1973
A new report by the world’s leading climate scientists has warned that Earth will warm by 1.5 degrees Celsius in the next 20 years, without drastic action taken to reduce greenhouse emissions.
“It is unequivocal that human influence has warmed the atmosphere, ocean and land.”
The crucial figure which is often quoted as “the point of no return” is 2 degrees Celsius, and this report flags that at our current course that will be exceeded within the 21st century – that means goodbye to agricultural production and ocean biodiversity in many parts of the globe within some of our lifetimes.
The report notes that human-driven warming has pushed the earth to a 100,000 year high in temperatures, and that across the world almost all countries have reported increases in ‘extreme heat’ levels and phenomenons.
Our morning calls continue, please do tune in for a daily dose of market insights and access to some leading experts in the funds management field.
Tune in from 9:30-10:00am AEST, Tuesdays and Thursdays.
Have a safe and enjoyable weekend.
– Max and the Mason Stevens team.
Please enter your email address to gain access to this content
You are not authorised to access this content
You have already viewed this page
The views expressed in this article are the views of the stated author as at the date published and are subject to change based on markets and other conditions. Past performance is not a reliable indicator of future performance. Mason Stevens is only providing general advice in providing this information. You should consider this information, along with all your other investments and strategies when assessing the appropriateness of the information to your individual circumstances. Mason Stevens and its associates and their respective directors and other staff each declare that they may hold interests in securities and/or earn fees or other benefits from transactions arising as a result of information contained in this article.