While coronavirus cases are increasing in some countries and states, recent economic data suggests that Australia’s economy is doing AAA ok.
Australian unicorn Canva is doing more than ok with a recent capital raising valuing it at $6bn USD. We also look at the rise of fraudulent business invoices, changes to uni fees, the future of Australian wine and preparing your mind for the next disaster – good grief!
The one-minute weekly recap
- Australian retail turnover increased by 16.3 percent in May seasonally adjusted. It is the largest rise in the 38 years of the ABS series. Retail was down 17.7 percent in April. Keep those credit cards spinning!
- The unemployment rate increased by 0.7 percentage points to 7.1 per cent in May according to the ABS. The number would have been higher but a larger than normal number of employed and unemployed stopped looking for work.
- On Friday, the Fair Work Commission increased the minimum wage by 1.75 per cent to $19.84 an hour from July 1 for essential services, such as childcare and healthcare. The timing of the rise will be staggered for other sectors. Now my boss has to give me that raise!
- Moody’s reaffirmed Australia’s AAA sovereign rating this week. Australia is only one of ten countries to maintain its AAA rating during the pandemic. Represent!
- NAB boss, Ross McEwan is expecting a W-shaped economic recovery with a second-wave of the coronavirus to slow down the initial economic recovery. An N-shaped recovery would have been better for branding purposes.
- The stock market took some hits in the past week with increasing coronavirus cases in the US and Australia. However, stocks have recovered in the last few days due to stronger US data and a strong NASDAQ.
- Coronavirus cases are spiking in Victoria. Undeterred, PM Scott Morrison says Australia must learn to live with the pandemic. Meanwhile, Dr Fauci (Director of the US National Institute for Allergy and Infectious Diseases) warns that the next two weeks are critical for the US as the rate of coronavirus cases grows in several states. Surely they will figure it out?
- Australian institutions and companies have faced an unrelenting cyber attack over the last week with many privately pointing to the Chinese government as the source.
A Sniippet for You
Cheaper uni degrees for careers in demand (AFR, 19 June)
- Government to adjust degree subsidies to encourage students towards industries with strong jobs demand.
- The cost of studying maths or agriculture will fall by as much as 61 per cent.
- Arts degrees will cost up to 113 per cent more.
Fraudulent invoices the new trend in business scams (AFR, 23 June)
- Fraudulent invoices cost businesses $132 million in 2019 according to the ACCC’s Targeting Scams report.
- It was the highest loss of any scam type.
- Scammers intercept legitimate email invoices and change the details to include fraudulent payment information.
Perth based web-design unicorn Canva hits $6bn USD (Forbes, 22 June)
- A recent capital raising has revalued Canva at $6bn USD, similar to that of Dropbox.
- Business has been booming during the pandemic.
- Up to 30m users a month are now using Canva.
- The company was started in 2007 as a yearbook design business in Perth.
Billionaire says the rise of Robinhood traders will ‘end in tears’ (The Daily Mail, 16 June)
- A rush of amateur traders have flooded commission-free trading apps.
- Robinhood, the most famous, has over 13 million users with a median age of 31.
- “They are just doing stupid things, and in my opinion, this will end in tears.”
- Sadly, the comment now seems prescient given the death of a young trader in the US this week.
The best new wines from Australia’s changing climate (AFR, 23 June)
- A new publication, Australia’s Wine Future: A Climate Atlas, outlines how climate change will affect Australia’s wine regions to the year 2100.
- Some growers are turning to technology to combat rising temperatures while others are introducing new grape varieties from Southern Europe.
- Some wine regions may be abandoned unless climate change is addressed.
A Sniippet of Finance advice
How to future-proof your investment unit (AFR, 19 June)
- Buying at the current lower prices and historically low interest rates could make for a great longer-term profit despite falling rental returns.
- Take a ten-year time horizon and buy in a promising but currently discounted area.
- Lock-in good renters for the long-term
A Sniippet of Brain food
Stop Preparing For The Last Disaster (Farnam Street Blog)
- Rather than preparing for the last disaster to repeat itself (availability bias), prepare to be surprised by life.
- The same disasters rarely happen twice in a row.
- Take a step back and look at what made you vulnerable to the last disaster rather than the disaster itself.
- Think seriously about a range of possible future disasters.
A Sniippet of Trivia
US Cheese prices hit a record high (Chicago Tribune, 22 June)
- Consumers are buying a lot more cheese than normal, pushing up prices. This is despite a drop-off in sales from restaurants and schools.
- Like oil, cheese prices are largely determined by trading. At 11am each trading day, key industry players trade cheese contracts for ten minutes on the Chicago Mutual Exchange (CME).
- Block cheddar provides the industry’ key reference price.
- Prices fell to a 20-year record low in April but have now rebounded strongly.