21 June 2021 | Weekly Snapshot

Did you know?

The number of cryptocurrencies currently listed on CoinMarketCap has jumped to 5633. In 2013 there was just 66 cryptocurrencies in existence.

Market Movements

Australian Share Market (ASX200) – Up 0.6% last week for its 5th straight weekly gain, capping off the best run of form for the local share market since December. The big banks continued gains (+1.37% for the week), but tech was the best performing sector (+7.49%) after a disappointing start to the years trading. Healthcare was the next best with a 4.45% jump with CSL +3%. Miners gave up 3% in gains.

US Share Market (S&P 500) – Down 1.91% recording its worst week since October in contrast to the Australian market as the market became concerned about future interest rate hikes. Central bankers expect GDP to hit 7% this year up from 6.5% as pent-up demand is unleashed as vaccination continues and the economy continues. Tech stocks like in Australia saw buying return whereas recent strong sectors like finance and miners saw profit taking.

Portfolio Movements

Shell (RDSA.LSE) – Shell is looking sell their US shale assets in the Permian Basin in Texas after US crude futures has jumped +50% this year to over $72 a barrel, more than double their 2020 lows. The sale could be for part or all of Shell’s position in the basin which represents 6% of Shell’s global oil and gas output last year, worth more than $10B. This could be used to reduce existing $71B in debt, below Shell’s $65B target as a part of its energy transition strategy. The acreage was bought in 2012 for $1.9B providing a solid profit but ongoing profits have remained elusive due to the scale and constant drilling required to boost output. A sale will enable an increase in renewables spending by 25% over Shell’s existing budget, helping to achieve targets sooner.

BHP (BHP.ASX) – BHP has announced it will go ahead with its large, long life, Canadian potash mine at a cost of $7.4B after years of weighing up the costs and benefits, but will still need to resolve port access to complete the final piece of the puzzle. This will be a big help for BHP in dealing with ESG concerns as potash doesn’t have high emissions in production, doesn’t release carbon dioxide or nitrous oxide and doesn’t pollute waterways. Production is expected to come online just as the next wave of increased demand for potash is estimated to arrive in the late 2020’s. Feeding the world is becoming more scientific and potash is the key determinant to ensuring soil nutrients are replaced to continue and increase the current levels of food production.

Amazon (AMZN.NAS) – Amazon will launch its first Amazon Fresh grocery store with a “just walk out option”, totalling avoiding any checkout lanes. Shoppers can wave their palm, scan a QR code in their AMZN app or use a credit or debit card upon entry. Customers repeat the mode of payment on their way out and receive a digital receipt on their Amazon account. AMZN’s deep learning and computer vision can keep track of items added or removed from a cart. AMZN has been rolling out parts of these technological developments over the past few years (as well as licensing the technology) but haven’t put them all together in one store as yet.

The week ahead

Domestically, we have retail sales to start the week, manufacturing PMI figures then a mid-week speech from the RBA. Internationally, it’s busier with the US Manufacturing and composite PMI figures, New home sales, Durable goods, Jobless claims, Personal Income and spending, consumer sentiment, along with the testimony from the Fed Chair. Japan releases CPI figures amongst the more important world releases.