“These are our dark times, but I can see that ray of light,”
This week, Scott Morrison’s words ushered in the dismal announcement of a further 227,000 jobs lost between April and May, boosting the total job loss to 835,000 and unemployment rates to 7.1%. These statistics are particularly amplified for young Australians over whom a 16.1% unemployment rate looms high and unforgiving. While the Morrison government seems to be placing its bets on the post-coved economic re-inflation to help resuscitate the amount of ‘real jobs’, many continue to fear the upcoming expiry of the JobKeeper subsidies in September.
On the bright side, business is A’boomin! National Australia Bank’s trading platform reveal that armchair investors have been eager to take advantage of the “dip” with 1.95 billion shares traded on Friday. Coinciding with the fall in popularity of stock market giants such as BHP and CSL, investors have demonstrated a preference in betting on travel businesses such as Webjet and Qantas. It’s clear that even within the crucible of economic downturns, investors continue to hedge their bets on cheap and attractive travel stocks. This upsurge in online day-trading may be a collateral consequence of the flexibility of working and, thus trading at home.
We’re falling flat on the stock market this week with the S&P/ASX200 closing at 5942.6 on Friday, only 0.1 per cent higher than last week. This week’s biggest surges were found in the tech sector, with Altium and Wisetech Global gaining 6.6 and 7.8 per cent respectively. This comes as Afterpay continues to win large with a 1.5 percent rise, reflecting the jump in retail sales and ‘retail therapy’ for consumers in recent weeks. In contrast to the gains in consumer discretionary spending, the big four banks saw only relatively modest gains and losses, paralleling an unvarying result for oil prices overnight.
Looking now to our global relations, we see mixed signals. In good news, Australia is buckling up to begin negotiations on a free trade deal with the United Kingdom that will begin on 29 June. Simon Birmingham suggests that this agreement would be “a strong signal of our mutual support for free trade”, especially when the Covid-19 pandemic blows over. This free trade agreement would help Australia expand its export opportunities, develop new jobs and support its investors in hopes of building a more resilient supply chain within the global market.
In worse news, Chinese real estate investment in Australian property has slumped almost 65 percent from April to May. The apathy of Chinese investors to purchase new apartments and housing is another blow to our already decelerating housing market. While last year saw Chinese investors contribute $6.1 billion to our home purchases, auctions and constructions in the last year, this recoil is likely to be a collateral consequence of our failing diplomatic relations.