While tech goliaths over the US have been signalling they will be slowing acquisition activity. On Tuesday, Apple announced that it would throttle back hiring and spending, adding fuel to the fire of recession fear. They were not alone. Microsoft and Google would follow on Thursday, with plans to rethink staffing spend. Microsoft will pause applications for open roles, while Google decided to freeze hiring for at least two weeks. As US inflation leaping to its highest in 41 years at 9.1%, no end in sight to the war in Ukraine, and a 1% rate hike hinted in the next Federal Open Market Committee (FOMC) meeting, the recession fears pot has gone from simmering away gently to full on boiling.

Goldman Sachs feat. Australian Liberal Party

In the crossovers of the year, investment bank Goldman Sachs has recruited fallen Australian Treasurer, Josh Frydenberg. The bank later on Thursday morning confirmed Frydenberg would take up the post as Senior Regional Adviser for Asia Pacific. The bank also said this week that it would scale back on hiring and let go of underperforming staff after reporting a 47 percent decline in earnings from a year earlier. Frydenberg is following a path similarly trodden by other Australian politicians such Paul Keating and Warwick Smith, who also decamped to private firms after departing politics. “Those concerned about potential conflicts of interest should note that Minister Frydenberg’s employment contract includes exclusionary clauses in relation to government, regulators and the organizations they regulate,” Goldman Sachs Australia CEO Simon Rothery said.

Woodside is heavily sold off, despite bumper profits.

Woodside Petroleum (ASX: WDS) shares took a beating towards the end of this week after the company released its quarterly results on Thursday, which showed that the company has cut its 2022 production forecast. The stock dropped 2.2% in trading on Thursday. The slide in share price was even though Woodside posted a 44% increase in revenue for the three months to June 30. The increase in revenue to $3.4 billion was due to high energy prices and the group’s tie-up with BHP’s oil and gas business. But in a statement issued on Friday, the oil company said it would 'like to clarify recent confusion regarding Woodside's production outlook' and reiterated that "…there is no change to the physical product volumes underpinning the full-year 2022 production guidance issued by Woodside in January 2022. Instead, the shift in the production outlook is definitional.

New TV anyone? Maybe a new PlayStation? Or a fridge?

On Tuesday, JB HI-FI (ASX:JBH) reported that Australian sales grew 10.9 per cent in the quarter and 3.4 percent for the year in earnings pre-released to the market. Equity analyst Johannes Faul said the figures indicated Australians were still keen for ultrawide monitors. "[The] profit numbers indicate that the appetite of Australian consumers for TV sets and fridges was much stronger in June quarter 2022 than we saw coming," he says. That is as the Reserve Bank continues to raise rates in a bid to rein in surging inflation and cool consumer spending after keeping rates at a record low to fuel growth through the pandemic. Shares in the electronics and white goods retailer surged 4% on Wednesday's open after the robust sales growth numbers. Its shares were trading at $44.46 at Friday’s close, up 10.1 percent from the beginning of the week.

ANZ bets it all on 3% cash rate in December

ANZ economists have responded to the rate news on Wednesday and say they now expect the RBA to hold through 2023 and 2024 at 3.35 per cent. It follows stronger than expected job market data for June. Latest forecasts The head of Australian Economics at ANZ, David Plank, last month described growth in employment as ‘spectacular, and saw wage growth accelerating throughout the remainder of this year and into 2023. The bank also considers there to be a very real risk of a 50-basis point increase by the RBA in August and again in September, although this is not for the base case. Compared to bond traders, ANZ’s forecast remain conservative. The ASX cash rate futures curve is embedding a cash rate of about 3.7% between February and October next year.

Chinese not paying for ghost homes

The finances of the Chinese property business is back in focus this week, as furious homeowners withhold their mortgage payments on unfinished properties. And the homeless homeowners are refusing to pay another penny, charging that developers have reneged on delivering homes they already paid for. The boycotts have expanded to 301 residential complexes across 91 Chinese cities. Because 70% of household wealth is tied up in China’s property market, China’s Banking and Insurance Regulatory Commission called on local banks to lend more money for the beleaguered developers to finish current projects. On Wednesday, state-capital-backed property developer Zhengzhou Real Estate Group and private owned Henan Asset Management Co said they would be setting up a fund for the real estate industry to give struggling developers cash to help finish unfinished projects.

RBA Audit

This week the Treasurer, Jim Chalmers, confirmed the Reserve Bank of Australia will undergo an independent review, focusing on the country’s long held inflation target, and monetary policy. This as backlash over the board and policy decisions has continued. The RBA has been criticised for leaving the record low cash rate in place for too long, with the rate hikes seen as belated by many. Governor Philip Lowe defended his ‘strong insurance mindset’ and reiterated that the Reserve Bank is committed to protecting the Australian economy from the adverse economic effects of the pandemic in his Wednesday’s speech. He conceded that the Board might have taken out ‘too much insurance’ but added: ‘That is the nature of insurance’.

Market Recap

Buying in the banking and tech shares more than offset losses among major miners and energy companies in a morning session on which the local share market has rebounded.

The benchmark S&P/ASX200 index on Thursday closed up 35.1 points, or 0.52 per cent, to a six-week high of 6,794.3 after earlier in the day being down 0.2 per cent.

The All Ordinaries lifted 43.2 points, or 0.62 per cent, to 7018.4.

“There’s so much happening obviously and the market sort of absorbing the good with the bad largely,” said Jessica Amir, market analyst at Saxo Capital Markets Australia.

"Overall sentiment is getting better and commodities are very beaten down" despite trading down on Thursday, Ms Amir added.

The tech sector turned in the biggest gain, extending Wednesday’s 3.8% jump the best single-day move in a month with a 3.2% advance.

Afterpay owner Block was 6.7 per cent higher, Whispir was up 9.1 per cent and Link Administration Holdings improved 12.6 per as the superannuation services company settled on a revised takeover offer with Dye & Durham.

Among the big banks, ANZ rose 2.2% to close at $21.93 after emerging from suspension following a capital raising to help fund its $4.9 billion acquisition of Suncorp’s banking business.

All the other major banks were also gainers: CBA gained 1.7 per cent to $97.62, Westpac 1.5 per cent to $20.84, and NAB up 0.03 per cent to $29.66.

Among the heavyweight miners, the big iron ore names were weaker after BHP dropped 0.9 to $36.79 and Rio Tinto shed 2.0 per cent to $95.83.

But lithium producers rose as Tesla Motors said in a second-quarter update that it expects 50% annual growth in vehicle deliveries.

“The lithium sector has had a good day because you have all these EV (electric vehicle) companies that still need to meet their targets for the year,” Ms Amir said.

Allkem rose 2.2 per cent, Pilbara advanced 3.2 per cent and Liontown Resources jumped 11.2 per cent as it awarded a $35 million WA construction project to Lycopodium Resources for its Kathleen Valley lithium project in WA.

Fellow goldminer Newcrest firmed 1.6% to $19.35 as it came in with fourth-quarter production numbers 5% ahead of consensus forecasts.

In the energy space, Woodside fell 4.4 per cent to $31.14 after announcing its first quarterly following the merger of BHP’s petroleum arm.

“All the key statistics were up,” Ms Amir said. “They were still one of the best performers on the year, they were still up about 40%.”

Fellow oil company Santos was also weak, down 1.9 per cent to $7.25 even though it announced first half sales revenue of $US3.8 billion, up 85%.

In health care, Telix Pharmaceuticals jumped 20.7 per cent to a six-month high of $6.72 after the company said it had produced $19.3 million from 10 weeks of sales of its recently launched prostate cancer diagnostic imaging product, Illuccix, in the US.

Former message board darling Zip Co jumped 16.5 per cent to 77.5 cents after the buy now, pay later company said its fourth-quarter revenue of $155.4 million, 27% higher than a year ago. Zip said it held $278 million in cash and reserves, which it said would be sufficient to see it through to cash profitability, although analysts pointed to its 40 basis point increase in Australian bad debts, to 3.8 percent.