In this photo taken on Monday, the official residence of the German president Frank-Walter Steinmeier, stands with some of its lights off to conserve electricity. Energy shortages have emerged as a significant problem for the EU’s largest economy, where about half of all German homes use fuel to stay warm. German Vice Chancellor and economy minister Robert Habeck conceded that “it’s no small feat” for the country to navigate challenges at a time when Russia is keeping gas flows to a minimum and the war in Ukraine drags on. Bloomberg reports that you'd have to pay over US $600 for a barrel of German power (that's German power, one of the more liquid traded markets), prices not seen since late last year in the wake of Russia's first Ukraine invasion.
And mortgagees under the pump … again.
The RBA hiked the cash rate for the fourth month in a row on Tuesday, adding another 0.5%, to 1.85%. After two days of snub, the big four have finally raised interest rates. Over the past few months, CBA, ANZ, Westpac and NAB have all been fast movers when it comes to passing on rate rises to their variable rate borrowers. All four of the banks have said they are raising interest rates by 0.5%. This will inevitably put borrowers under the pump with inflation at 6.15% year-on-year and with food and non-alcoholic beverage inflation edging 2% higher over the quarter. The Governor in his Tuesday speech talked about needing to keep inflation at a sustainable level. “The Board will place a high priority on a return to having inflation in the 2–3 percent range, while wishing to keep the economy on an even keel,” he says.
Oil tumbles even more this week
Brent crude traded 14% lower than last Friday after new US data revealed fuel consumption has cooled and stockpiles expanded. Friday Brent crude for US $ 94.58 per barrel, Febru following the beginning of this year. The decline in price this week follows the resumption of crude oil production in Libya which has provided some relief for the tightness in global supply. After climbing to $127.98 earlier this year, Brent crude has been sliding since June. The sell off has erased all the gains made when Russia first attacked Ukraine late last year.
Australian tech Cos not on the same frequency
On this week’s earnings calendar, were Australian technology companies like Atlassian and Square. On an annual basis Atlassian posted revenue of $759.8 million, up 36% compared to last year. That profit topped analyst estimates by US$36 million, U.S. reports said. To reflect the good news, Atlassian’s share price leapt more than 10% in after hours trade on Friday AEST. This is certainly not the case with Block. The financial services company said it posted a loss in the second quarter in a quarterly report it released pre-market on Friday that sent the stock price lower. Total net revenue in the past quarter decreased 6%, largely due to the US $938.4 million of bitcoin revenue loss. Block shares finished the week 9.05% higher and traded at $118.30 per share.
Uber catches a break
Rideshare business Uber made that history as it reported its first quarter of positive cash flow after 13 years of burning through the bills. The company on Tuesday reported US $382 million in free cash flow (as shown in chart below) for the last three months, 250 percent more than what analysts had expected, according to S&P Capital IQ. The company has burned through US $25 billion since 2009 and it hasn’t had a single quarter where it made positive free cash flow. The ‘stock exploded higher’ Once finally bringing the long-awaited result for shareholders, the company’s share price surged 15.7% to close the week at $31.85 a share.
AMTD who?
Hong Kong financial services company AMTD Digital has gone parabolic, with shares skyrocketing 4,835.23% over the last month. The micro cap has a market value in excess of US$300 billion, and this week alone has overtaken the value of investment banking behemoths Bank of America, Morgan Stanley and Goldman Sachs. The company went public on July 16, listing shares for US $16.21 apiece. ADMT Digital has since emerged as the world's third-largest financial company by market value. For those wondering why the stock has exploded in the last month Reddit has the answer. Reddit users on forums like WallStreetBets have taken to the platform to hype the company, urging other users to buy the stock, hurling investors back to the meme stock days of 2021. The share price reached US $1,679 on Tuesday but has since eased back to US $800.
