Hi All,

The divide between equity markets and the main street has not been wider for some time. I almost had given up on writing about the macro, as seemingly it matters less given the ever-expanding list of assets the FED is allowed to buy, and the amount of stimulus they are going to load into the system. 

I will keep going at it nonetheless!

Have a good weekend


Australia under Cyberattack - FCT (A$0.11)

Without saying it was related to China, Morrison basically said just that. The govt may move further to legislate minimum standards of protection for larger/medium-sized companies. 

Would be hard to ask for a better set of headlines if you were selling Cyber protection solutions. 

We recently helped Firstwave Cloud Technology, which has a cybersecurity platform ($FCT FCT.ASX) raise A$15m at $0.045 with Morgans. They recently launched a new product aimed at protecting workers logging on from home, along with their existing Web, email and firewall (all sold through existing Telstra channel) .

The reality for FCT though is it's all about turning proof of concept trials in the US (elsewhere) into revenue. And under John Grant, they have enough capital behind them for 2 years of runway (first time they haven't been cum raise for years) and a line of sight to INTL that can be realistically articulated. 

Morgans updated their price target to 16.5c during the week.

***I own FCT shares***

Kid's punting stocks on Robinhood can't really be driving this rally...

Some great quotes during the week, like "Buffet's an idiot", and "trading is all that matters". I can assure you, at some point, profits will matter. (that date for Tesla looks to be well into the future though..punching through $1000)

Nikola (NKLA.NAS) - concept to produce hydrogen/battery powered trucks as a great recent example

Cars sold 2019:
Ford: 5.5 million
Nikola: 0
Market capitalization:
Ford: $28.7 billion
Nikola: $29 billion

US Retail Sales vs Industrial Production


Earlier in the week, US retail sales surprised. Economists consensus was way off, just shows how difficult forecasting anything over the next QTR or two is going to be. 

US May retail sales +17.7% mom after -14.7% in Apr. Still -6.4%yoy but far better than expected. Makes sense given the record April savings rate of 33% pointing to all the pent up demand. 

No "V" shaped recovery in IP though (yet), to be fair this was always going to lag retails sales.

And while Month on Month numbers may look dramatic, always worth reflecting on the year on year numbers!

AUS immigration has ground to a halt

Zero in April given border shutdown. Forecasters say if it was to remain near zero it reduces dwelling demand by 80,000 pa.

Pokies are back in business - so is TAH

Note Tabcorp (TAH) is one of those who were expected to raise given debt levels but managed their way through. Wagering turnover (Horse Racing managed to keep them alive, sports coming back online) and gaming coming back online. Still low compared to 6 months ago. 

FED - raising rates will only be dreamed about in a few years 

FED - Sometime out into 2022 might rates move up from zero....


Thomas Schoenmaker
Head of Wealth Management

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