Anything to do with powering up data centres is going bonkers…

• Following Wall Street, our market is lower today, after US bond yields reached a two-decade high and Oil held above US$111 a barrel. The 30-year yield rose to 5.19%, a level last seen on the eve of the 2007 GFC.
• Bond markets are skittish amid surging inflation and massive public borrowing. Higher bond yields push up debt interest payments – our government payments are at 26.8% of GDP – the highest in four decades outside of COVID.
• Although the latest RBA minutes suggest we might get a “Hold” in June, money markets are pricing in an 81% chance of a rate rise by the US Federal Reserve this year.
• The S&P/ ASX 200 is down at 8,498 as I type and the Aussie dollar is at .7097.
• Morgan Stanley is forecasting the Australian share market will hit record highs by mid-2027, with mining stocks doing the heavy lifting.
• Interestingly, the share prices of local electrical contractors and service providers have exploded higher (one over 4,000%), with anything to do with AI investment seen as a solid bet right now.
• There is a lot of commentary on the proposed tax changes. My favourite is from ex RBA Governor, Mark Barnaba, who firmly expects the Albanese Government to realise it has miscalculated and back-pedal on elements of the reforms, “they’re nothing if not political animals, so they will work it out”. I certainly hope so, Mark.
• House prices on the East Coast are reflecting broader concerns and are accelerating in their decline. Sydney’s Auction clearance rate dropped to just 31% with Melbourne only a little better at 42%. Our local market is showing more resilience, although it’s clear the market is changing.
• Call me to initiate a comprehensive strategic plan to get you moving.

Jody Fewster

Please contact me on 0414 688 988 or by email at jody.fewster@raywhite.com

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