What We Don’t Know About The Stock Market
Kanebridge News
    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,634,647 (-0.13%)       Melbourne $1,014,731 (+0.07%)       Brisbane $1,039,137 (-0.36%)       Adelaide $946,102 (+1.11%)       Perth $923,113 (+0.00%)       Hobart $749,205 (-0.26%)       Darwin $765,670 (+0.77%)       Canberra $969,848 (-0.24%)       National $1,071,435 (+0.00%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $758,834 (-0.41%)       Melbourne $487,148 (-0.17%)       Brisbane $653,985 (-0.35%)       Adelaide $489,117 (+0.05%)       Perth $515,967 (+2.54%)       Hobart $536,451 (-0.17%)       Darwin $393,381 (-0.30%)       Canberra $502,832 (-0.14%)       National $562,892 (-0.01%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 8,884 (+55)       Melbourne 12,619 (-146)       Brisbane 7,202 (+7)       Adelaide 2,094 (-28)       Perth 7,246 (-121)       Hobart 1,177 (-5)       Darwin 180 (-6)       Canberra 935 (0)       National 40,337 (-244)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 7,552 (-28)       Melbourne 7,416 (-124)       Brisbane 1,405 (-19)       Adelaide 335 (-10)       Perth 1,635 (-17)       Hobart 211 (-4)       Darwin 270 (-2)       Canberra 1,088 (-3)       National 19,912 (-207)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $790 ($0)       Melbourne $590 ($0)       Brisbane $650 ($0)       Adelaide $620 ($0)       Perth $680 (+$3)       Hobart $550 ($0)       Darwin $780 (-$10)       Canberra $690 (+$10)       National $678 (-$)                UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $750 ($0)       Melbourne $580 (+$5)       Brisbane $650 ($0)       Adelaide $500 ($0)       Perth $650 ($0)       Hobart $463 (+$13)       Darwin $590 ($0)       Canberra $580 ($0)       National $607 (+$1)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 6,170 (+108)       Melbourne 7,721 (+258)       Brisbane 4,198 (+175)       Adelaide 1,437 (+53)       Perth 2,145 (+88)       Hobart 223 (+20)       Darwin 138 (+3)       Canberra 618 (+18)       National 22,650 (+723)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 10,392 (+146)       Melbourne 7,383 (+273)       Brisbane 2,399 (+176)       Adelaide 348 (+13)       Perth 521 (+51)       Hobart 92 (+16)       Darwin 247 (+4)       Canberra 679 (+19)       National 22,061 (+698)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.51% (↑)        Melbourne 3.02% (↓)     Brisbane 3.25% (↑)        Adelaide 3.41% (↓)     Perth 3.83% (↑)      Hobart 3.82% (↑)        Darwin 5.30% (↓)     Canberra 3.70% (↑)        National 3.29% (↓)            UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 5.14% (↑)      Melbourne 6.19% (↑)      Brisbane 5.17% (↑)        Adelaide 5.32% (↓)       Perth 6.55% (↓)     Hobart 4.48% (↑)      Darwin 7.80% (↑)      Canberra 6.00% (↑)      National 5.61% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 2.0% (↑)      Melbourne 1.9% (↑)      Brisbane 1.4% (↑)      Adelaide 1.3% (↑)      Perth 1.2% (↑)      Hobart 1.0% (↑)      Darwin 1.6% (↑)      Canberra 2.7% (↑)      National 1.7% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 2.4% (↑)      Melbourne 3.8% (↑)      Brisbane 2.0% (↑)      Adelaide 1.1% (↑)      Perth 0.9% (↑)      Hobart 1.4% (↑)      Darwin 2.8% (↑)      Canberra 2.9% (↑)      National 2.2% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 33.7 (↑)      Melbourne 32.8 (↑)      Brisbane 33.8 (↑)      Adelaide 27.5 (↑)      Perth 38.4 (↑)      Hobart 31.5 (↑)      Darwin 47.8 (↑)      Canberra 34.3 (↑)      National 35.0 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 36.1 (↑)      Melbourne 33.5 (↑)      Brisbane 33.1 (↑)      Adelaide 26.5 (↑)      Perth 40.9 (↑)      Hobart 35.9 (↑)        Darwin 33.3 (↓)     Canberra 41.3 (↑)      National 35.1 (↑)            
Share Button

What We Don’t Know About The Stock Market

Meta’s down, Amazon’s up, and there are four big questions for investors.

By James Mackintosh
Mon, Feb 7, 2022 10:22amGrey Clock 3 min

Extraordinary moves in Big Tech stocks in response to small changes in their earnings show what a wacky market we’re in. Uncertainty about the future of the economy in general and the tech sector in particular are extremely high. In short, nobody knows anything.

The biggest moves in terms of dollar value were in Meta (Facebook-as-was on Thursday lost the most market value in a day of any U.S. company ever) and Amazon (which had the biggest market-value gain of any U.S. company ever on Friday). The uncertainty is deep, but there are common threads tying their moves into other hefty price swings in this earnings season.

Meta, Amazon, Snap, Paypal, Netflix and Spotify were among those having outsize moves in part because they have premium valuations based on expectations of long-term growth. Relatively small changes in the market’s best guess of that rate of growth have very large impacts on their value today, because so much of their earnings potential lies far in the future.

But the scale of the moves is also large because investors are wrestling with major unknowns, any one of which could hit stocks hard. Here are the four most important:

Will inflation hammer profit margins?

Companies are faced with soaring input costs, with producer prices rising even faster than consumer inflation, itself the highest year-over-year rate since 1982. Investors are closely focused on which businesses have the power to raise prices to offset higher costs. On Friday Clorox stock plunged 14%, the worst in the S&P 500, in large part because it warned about rising costs. Amazon was up 14% in part because its planned increase in the price of a Prime subscription reassured investors that it can offset soaring delivery and labour costs.

Will Covid-era gains fade?

Lockdowns accelerated the switch to many online services, but some will prove temporary. No one wants to be like Peloton Interactive, whose home cycling workout has proved tougher to sell when customers have the choice of outdoor exercise, and whose stock has lost three-quarters of its value since its peak a year ago. Some of the reason for Netflix’s big fall after its earnings was because it turns out people prefer real life to home movies; similarly, Clorox disinfectant sales have fallen back, and PayPal growth has slowed.

Will Big Tech eat itself?

One of the most attractive features of the leading online platform companies is the defensive benefit they get from being big, what are known as “network effects.” People use Facebook because other people use Facebook, so everyone has to use Facebook. Except, not so much. Meta stock tumbled 26% on Thursday primarily because TikTok is beating it in the competition for young eyeballs. Amazon and Apple made Meta’s situation worse, Amazon because it is snaffling advertising dollars at a rapid rate, Apple by changing privacy settings, something Facebook has struggled with.

Competition has already hit several other tech themes. Netflix has to spend heavily to maintain its position because of the streaming wars with services from Amazon, Disney, Comcast and others. Uber Technologies got an early lead in online taxi services, but it turned out to be an easy model to copy and many other services sprang up around the world, competing both for customers and drivers. The pattern is a standard one in tech: Microsoft has long since lost its virtual monopoly in operating systems and word-processing software, while IBM’s dominance of PC hardware is ancient history.

The battlegrounds of the future are cloud computing and self-driving cars, and the competition is keen. So far there’s no sign of a slowdown in the cash milked from the cloud by Amazon, Microsoft and to a lesser extent Alphabet, but all are investing heavily, and it might become competitive in time.

True self-driving cars aren’t for sale yet, but Alphabet, Apple and Tesla are all spending heavily on development and, in the case of Alphabet’s Waymo, some limited services. Amazon and Intel have bought in to the area, and a bunch of traditional carmakers have made progress, too. Whoever cracks it first might get a big lead, and would deserve a big valuation, but competition, as well as regulation, would surely follow.

Will bond yields carry on up?

Growth companies are highly sensitive to bond yields, because so much of their lifetime profits lie further in the future than cheaper businesses. Bond yields jumped again on Friday on the back of a strong jobs report, taking the 10-year Treasury yield up to where it started 2020 for the first time since then. If the economy stays strong and yields keep rising, it will be a headwind for the big growth stocks.

Change the answers to any of these questions and it justifies a big move—down in most cases—in the price of exposed stocks. The number of big price swings so far in this earnings season might be because coming out of the pandemic creates turning points in all these issues at once. But a question that nags at me is whether the unstable prices point to a deeper problem that could lead to much broader market troubles. Like everyone else, though, I don’t know.

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: February, 7, 2022.



MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Money
Israel Defies Expectations With Surge in Tech Funding Despite War
By Carrie Keller-Lynn 14/01/2025
Money
FAMILY MATTERS IN THE GREAT WEALTH TRANSFER
By Emma Koehn 14/01/2025
Money
Stock Futures Are Little Changed Ahead of Jobs Data
By JANET H. CHO 06/01/2025
Israel Defies Expectations With Surge in Tech Funding Despite War

The 28% increase buoyed the country as it battled on several fronts but investment remains down from 2021

By Carrie Keller-Lynn
Tue, Jan 14, 2025 3 min

As the war against Hamas dragged into 2024, there were worries here that investment would dry up in Israel’s globally important technology sector, as much of the world became angry against the casualties in Gaza and recoiled at the unstable security situation.

In fact, a new survey found investment into Israeli technology startups grew 28% last year to $10.6 billion. The influx buoyed Israel’s economy and helped it maintain a war footing on several battlefronts.

The increase marks a turnaround for Israeli startups, which had experienced a decline in investments in 2023 to $8.3 billion, a drop blamed in part on an effort to overhaul the country’s judicial system and the initial shock of the Hamas-led Oct. 7, 2023 attack.

Tech investment in Israel remains depressed from years past. It is still just a third of the almost $30 billion in private investments raised in 2021, a peak after which Israel followed the U.S. into a funding market downturn.

Any increase in Israeli technology investment defied expectations though. The sector is responsible for 20% of Israel’s gross domestic product and about 10% of employment. It contributed directly to 2.2% of GDP growth in the first three quarters of the year, according to Startup Nation Central—without which Israel would have been on a negative growth trend, it said.

“If you asked me a year before if I expected those numbers, I wouldn’t have,” said Avi Hasson, head of Startup Nation Central, the Tel Aviv-based nonprofit that tracks tech investments and released the investment survey.

Israel’s tech sector is among the world’s largest technology hubs, especially for startups. It has remained one of the most stable parts of the Israeli economy during the 15-month long war, which has taxed the economy and slashed expectations for growth to a mere 0.5% in 2024.

Industry investors and analysts say the war stifled what could have been even stronger growth. The survey didn’t break out how much of 2024’s investment came from foreign sources and local funders.

“We have an extremely innovative and dynamic high tech sector which is still holding on,” said Karnit Flug, a former governor of the Bank of Israel and now a senior fellow at the Jerusalem-based Israel Democracy Institute, a think tank. “It has recovered somewhat since the start of the war, but not as much as one would hope.”

At the war’s outset, tens of thousands of Israel’s nearly 400,000 tech employees were called into reserve service and companies scrambled to realign operations as rockets from Gaza and Lebanon pounded the country. Even as operations normalized, foreign airlines overwhelmingly cut service to Israel, spooking investors and making it harder for Israelis to reach their customers abroad.

An explosion in negative global sentiment toward Israel introduced a new form of risk in doing business with Israeli companies. Global ratings firms lowered Israel’s credit rating over uncertainty caused by the war.

Israel’s government flooded money into the economy to stabilize it shortly after war broke out in October 2023. That expansionary fiscal policy, economists say, stemmed what was an initial economic contraction in the war’s first quarter and helped Israel regain its footing, but is now resulting in expected tax increases to foot the bill.

The 2024 boost was led by investments into Israeli cybersecurity companies, which captured about 40% of all private capital raised, despite representing only 7% of Israeli tech companies. Many of Israel’s tech workers have served in advanced military-technology units, where they can gain experience building products. Israeli tech products are sometimes tested on the battlefield. These factors have led to its cybersecurity companies being dominant in the global market, industry experts said.

The number of Israeli defense-tech companies active throughout 2024 doubled, although they contributed to a much smaller percentage of the overall growth in investments. This included some startups which pivoted to the area amid a surge in global demand spurred by the war in Ukraine and at home in Israel. Funding raised by Israeli defense-tech companies grew to $165 million in 2024, from $19 million the previous year.

“The fact that things are literally battlefield proven, and both the understanding of the customer as well as the ability to put it into use and to accelerate the progress of those technologies, is something that is unique to Israel,” said Hasson.

MOST POPULAR
11 ACRES ROAD, KELLYVILLE, NSW

This stylish family home combines a classic palette and finishes with a flexible floorplan

35 North Street Windsor

Just 55 minutes from Sydney, make this your creative getaway located in the majestic Hawkesbury region.

Related Stories
Lifestyle
The Price of Everlasting Health and Vitality
By Chelsea Spresser 08/01/2025
Money
Top 5 ways to stay safe online — and avoid the holiday horror stories
By KANEBRIDGE NEWS 19/12/2024
Money
Alibaba to Sell Stake in Chinese Hypermarket Operator
By P.R. VENKAT 02/01/2025
0
    Your Cart
    Your cart is emptyReturn to Shop