{"id":2391,"date":"2023-05-14T23:58:17","date_gmt":"2023-05-14T23:58:17","guid":{"rendered":"https:\/\/www.syfe.com\/au\/learn\/?p=2391"},"modified":"2023-08-04T07:19:30","modified_gmt":"2023-08-04T07:19:30","slug":"weekly-market-wrap-13-may-2023","status":"publish","type":"post","link":"https:\/\/www.syfe.com\/au\/learn\/weekly-market-wrap-13-may-2023\/","title":{"rendered":"Weekly Market Wrap | 13 May 2023"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large is-resized\" style=\"margin-bottom:25px\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/Untitled-design-2023-05-15T093211.956-1024x256.png\" alt=\"\" class=\"wp-image-2397\" width=\"1068\" height=\"289\"\/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong> 1. US Inflation slips to the lowest level since 2021<\/strong><\/h2>\n\n\n\n<p>Inflation in the United States has slowed to its lowest rate in two years, according to the Consumer Price Index (CPI). The CPI index, which measures the cost of a basket of goods rose 0.4% in April and 4.9% over the last 12 months but this was a deceleration from 5% in the previous month. Analysts had expected the figure to remain at 5%.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"490\" src=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7-1024x490.png\" alt=\"\" class=\"wp-image-2392\" srcset=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7-1024x490.png 1024w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7-300x144.png 300w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7-768x367.png 768w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7-696x333.png 696w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7-1068x511.png 1068w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7-878x420.png 878w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-7.png 1438w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><em>US monthly inflation levels<\/em><\/p>\n\n\n\n<p>The largest contributor to the headline figure was the cost of housing which increased 0.4% in April. The energy index rose 0.6% mostly due to an increase in the cost of petrol. Falling airline fares and lower prices for new cars helped to pull down the headline number.&nbsp;<\/p>\n\n\n\n<p>Last week, the Fed raised its key rate by 0.25% taking it to a range of 5% to 5.25%, its highest level since 2007. This marked the tenth consecutive increase in over a year but Federal Reserve chair Jerome Powell indicated the bank might be getting \u201ccloser\u201d to stopping the rate hikes. Analysts believe that the Fed\u2019s latest rate hike was likely its last for this cycle, and that the bank may cut rates by 75 basis points before the year ends.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What does it mean for the investors?<\/strong><\/h2>\n\n\n\n<p>Investors can look at the data as a positive signal. After continuously hiking rates since the past one year, the Fed is now being able to see signs of inflation going down. Investors are pricing in rate halts and cuts by the end of the year more confidently than before. This can be better in terms of valuing companies. Companies will be able to borrow at a cheaper rate and therefore, growth should be positively impacted.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>2. Airbnb results beat estimates but share price tumbles<\/strong><\/h2>\n\n\n\n<p>Airbnb beat analyst estimates on the top and bottom lines in Q1, with total revenue rising 20% YoY and swinging to a net profit of $117 million. However, shares of Airbnb dropped by 10% on Wednesday following the release of the company\u2019s Q1 report which provided slightly weaker guidance and a cautious outlook for Q2.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"825\" height=\"531\" src=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/Screenshot-2023-05-13-at-9.20.42-PM.png\" alt=\"\" class=\"wp-image-2393\" srcset=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/Screenshot-2023-05-13-at-9.20.42-PM.png 825w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/Screenshot-2023-05-13-at-9.20.42-PM-300x193.png 300w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/Screenshot-2023-05-13-at-9.20.42-PM-768x494.png 768w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/Screenshot-2023-05-13-at-9.20.42-PM-696x448.png 696w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/Screenshot-2023-05-13-at-9.20.42-PM-653x420.png 653w\" sizes=\"auto, (max-width: 825px) 100vw, 825px\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\">Source: Google Finance<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why did it happen?<\/strong><\/h2>\n\n\n\n<p>Brian Chesky, CEO of Airbnb, cited affordability pressure due to inflation in North America as the reason for the company\u2019s cautious outlook. Chesky emphasised the importance of moderating prices in the region to address price sensitivity and increase occupancy across more listings as rates normalise.<\/p>\n\n\n\n<p>Additionally, Airbnb cautioned that Q2 would face challenging year-over-year comparisons in \u201cNights and Experiences Booked\u201d due to pent-up demand from 2022 and the COVID Omicron variant. The company forecasted Q2 revenue between $2.35 billion and $2.45 billion, falling short of analysts\u2019 expectations of $2.42 billion.<\/p>\n\n\n\n<p>Analysts noted that Airbnb\u2019s Q1 results were solid, but there are concerns about the upcoming Q2. They expressed some caution due to macroeconomic and discretionary spending risks in the short term, but still view the company\u2019s longer-term outlook positively thanks to its strong brand, platform, and management team. Generally, a boom in the travel market leads to a boom in the hospitality industry and the retail sector as well.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>3. Australia forecasts first surplus since global financial crisis<\/strong><\/h2>\n\n\n\n<p>Australia\u2019s government has forecasted a balanced budget for the first time in 15 years due to high commodity prices and income tax revenue. However, Treasurer Jim Chalmers warned of economic pressures, including rising unemployment and inflation that could deepen the country\u2019s debt. Chalmers announced a surplus of A$4.2 billion (US$2.8 billion) for the fiscal year ending June 30 but economic growth is expected to drop to 1.5% next year due to weak global economic conditions.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"474\" height=\"266\" src=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-6.png\" alt=\"\" class=\"wp-image-2394\" srcset=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-6.png 474w, https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/05\/image-6-300x168.png 300w\" sizes=\"auto, (max-width: 474px) 100vw, 474px\" \/><\/figure>\n<\/div>\n\n\n<p class=\"has-text-align-center\">Source: Bloomberg<\/p>\n\n\n\n<p>Chalmers emphasised that inflation remains the primary economic challenge that could erode real wages and drive rate rises. Therefore, the budget is designed to alleviate inflationary pressures rather than add to them. While the debt outlook has improved, the economy is projected to return to a A$13.9 billion (US$9.4 billion) deficit next year, doubling to A$35.1 billion (US$23.8 billion) by 2024-25.<\/p>\n\n\n\n<p>According to economists, the surplus is due to the Russia-Ukraine War and inflationary impacts, particularly on energy prices. However, opposition treasury spokesperson Angus Taylor argued that the surplus was a result of a recent commodity price windfall and not the government\u2019s economic management. Taylor also warned that some of the new spending policies announced on Tuesday could lead to inflation. The AUKUS agreement with the US and Britain is one of the new government costs and is expected to cost Australia A$9 billion (US$6 billion) over the next four years to cover preliminary work.<\/p>\n\n\n\n<div class=\"wp-block-uagb-image uagb-block-8ef8a268 wp-block-uagb-image--layout-default wp-block-uagb-image--effect-static wp-block-uagb-image--align-none\"><figure class=\"wp-block-uagb-image__figure\"><img decoding=\"async\" srcset=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/07\/SYFE50_landscape-1024x536.png \" sizes=\"auto, (max-width: 480px) 150px\" src=\"https:\/\/www.syfe.com\/au\/learn\/wp-content\/uploads\/2023\/07\/SYFE50_landscape-1024x536.png\" alt=\"\" class=\"uag-image-2681\" width=\"1024\" height=\"536\" title=\"\" loading=\"lazy\"\/><\/figure><\/div>\n\n\n\n<div style=\"height:100px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p><sup>Investing involves risk, including the risk of losing your invested amount. Any information that may be in this communication is general in nature only and is current at the time of writing. Syfe does not make recommendations of any kind or provide personal advice that take into account your objectives, financial situations or needs. You should therefore consider the appropriateness of the information in light of your own objectives, financial situation or needs before acting on such information, and\/or speak to your financial or tax adviser for personal advice. Past performance figures are based on information provided by third parties and may not be accurate. Any references to past performance and future indications are not, and should not be taken as, a reliable indicator of future results. Syfe does not intend for any statement made here to relate to the acquisition or disposal of any shares in the companies or other financial products named here. Syfe makes no representation and assumes no liability as to the accuracy or completeness of the content of this communication.<\/sup><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>1. US Inflation slips to the lowest level since 2021 Inflation in the United States has slowed to its lowest rate in two years, according to the Consumer Price Index (CPI). The CPI index, which measures the cost of a basket of goods rose 0.4% in April and 4.9% over the last 12 months but [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":2396,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_uag_custom_page_level_css":"","footnotes":""},"categories":[219],"tags":[],"class_list":{"0":"post-2391","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-discover_syfe"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Weekly Market Wrap | 13 May 2023 - Blog Syfe AU<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Weekly Market Wrap | 13 May 2023 - Blog Syfe AU\" \/>\n<meta property=\"og:description\" content=\"1. US Inflation slips to the lowest level since 2021 Inflation in the United States has slowed to its lowest rate in two years, according to the Consumer Price Index (CPI). 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