Insights from the trail - 2/12/22

Is it a bird, is it a plane. No its Powell the dove! Markets rallied this week after Powell made more dovish comments, including “I don’t want to over-tighten…hence why it makes sense to slow down”. 

On the inflation front we had weaker prints in the Euro-Area and Australia, suggesting we are past the peak. This follows the weaker US CPI print for October as well.

Oil rallied as EIA data showed US crude stockpiles fell by 12.6m barrels last week, the largest fall since 2019. As we await to see what OPEC decides at their meeting on December 4. And the Russian sanctions are set to come into effect on Monday December 5.

And we’ve made it to the ho-ho-home stretch. 23 days until Christmas and 29 days until it is 2023!

Three other things that got the team talking this week –

1. Still into it!…

S3 Portfolio holding Intuit reported this week. Core SME revenue growth is running at 19% YoY demonstrating the power of the Quickbooks franchise. Despite the weakening macroeconomic backdrop, we believe Intuit provides defensive tech exposure with the SME business (50% of group revenue) being well positioned to deliver high teens revenue growth going forward from a combination of customer acquisition, price, and customers taking up more products.  

2. The golden dragon reawakens…

Beijing reported a record 5,006 daily Covid cases yesterday, but news this week has focused on China’s ‘reopening’. We found some charts on the state of China, including their number of economic indicators, and population change. 

3. No home among the gum trees…

Home ownership affordability declined 30% in the US in September, due to rising mortgage interest rates. For reference, an index value lower than 100 indicates that the median household income is insufficient to cover the annual costs of owning a median-priced home (i.e. where the housing cost is greater than 30% of income). The level is now below where it was during the GFC. 

Have a great weekend! Gooooo Socceroooos!!!!!