Market Recap: 27th July

“…national debt has been quickly piling up. The government might have more wriggle room for stimulus than it likes to admit.” – Alan Kohler

How does $750 bn of debt sound…?

Adding to Australia’s $700 bn debt, the government has taken an additional $50bn loan by selling government bonds. More and more of these borrowed funds are being channeled back into the economy through stimulus packages and subsidies, in hopes to pick up economic growth. Speaking of which, Josh Frydenberg recently announced a second round of Economic Support Payments in the form of: one-off $750 payments to eligible individuals! Moreover, there’s been such a build-up for announcing changes to the $86 billion JobKeeper program and the JobSeeker coronavirus supplement. 


  • JobKeeper payments will fall from $1500 a fortnight to $1200 a fortnight in September. While anticipating an even further decline in 2021
  • The JobSeeker payment will fall from $1100 to $800 a fortnight in September
  • People working fewer than 20 hours a week will receive $750 in September and $650 in 2021

“JobSeeker and JobKeeper are payments that support people’s incomes but are not designed to prevent them from going out and seeking work.”

Use your payments wisely. 

Victoria records a $7.5 bn budget deficit, while Tim Pallas predicts a 9% unemployment rate, due to another 50,000 Victorians expected to lose their jobs. Carrying on from the national budget deficit, the VIC state government announced the borrowing of an extra $24.5 bn. This would be put towards an emergency fund, of which could help the state recover from the pandemic over the next two years. Approximately $3 bn has been put towards the public healthcare system and community support.

What has once been a ‘safe haven’ for investors pulls an uno reverse card, that is Sydney’s property market. With over 27,000 properties sitting empty across Sydney, the CBD sees an almost double increase in vacancies at 13.8%. Moreover, Ultimo and Burwood see quadrupled and tripled vacancies at 9.1% and 8.4% respectively. Closing the Australian borders sees decreasing demand from international students and younger individuals seeking share houses, which pushes prices lower and lower.  In contrast, some suburbs are holding up and contradicting the trends, such as Ryde, Homebush and Gordon and Roseville on the North Shore, having a less than 1.5% increase in rental vacancies. The figures sit at 1.2%, 1.1% , 0.5% and 0.6% respectively. The power has shifted over to the renters as more alternative options pop up.

Turning to our stock markets for this week, investors were left uneasy by global skirmishes and an uncertain economic bounce-back. The ASX closed 1.2% lower on Friday to finish at 6024.0 after a week of slight rises and falls during the week. Interestingly, both tech and After-pay stocks were down 2.5% and 3.4% respectively, with the sole winner being the utilities sector surging due to all-round gains by AGL Energy and APA. In international markets, the CSI300 fell 3%, amidst growing friction between national trade giants China and the US. With China ordering the cessation of all operations held by the US consulate in Chengdu, this will have detrimental ramifications for the US who relies on the consulate to provide updates on Tibetant conflict in the area.