Market Insights – 1st of July 2019

Market Insights – 1st of July 2019

Market Insights

 

1st July 2019

Top Stocks

Market and Exchange Rates

Commodities

Major Market Announcements

The Reserve Bank of Australia may deliver another interest rate cut as soon as this week. Many economists expect the RBA will lower the cash rate by 25 basis points for the second month in a row, taking it to a new low of 1.0 per cent.

– Banks face growing financial pressure to withhold some of any cut in official interest rates from their mortgage customers this week, due to very low rates being paid on deposits.

– There’s a host of big superannuation changes that come into effect July 1, designed to help people with low super balances and multiple accounts ensure their retirement savings aren’t swallowed up by fees or insurance premiums costs.

– Fortescue Metals Group founder Andrew Forrest says the iron ore miner has achieved self-sufficiency across its supply chain after completing the company’s new tug rollout at Port Hedland harbour.

– Fifth of tax cuts set for top earners. More than a fifth of the federal government’s $158 billion income tax package will flow to workers earning more than $180,000 in the coming decade, new figures have revealed.

– The big banks will soon have another round of public hearings to contend with after the corporate regulator flagged plans to grill them over their lending practices

Market Update

Australian shares are poised to open higher to start the new fiscal year, bolstered by the weekend US-China trade truce and with investors positioning for a rate cut as soon as tomorrow.

ASX futures were up 18 points or 0.3 per cent to 6577 over the weekend. The S&P/ASX 200 shed 47.5 points or 0.7 per cent to 6618.80 on Friday.

The local currency was 0.2 per cent higher to 70.20 US cents.

Presidents Donald Trump and Xi Jinping agreed to renew efforts to resolve the trade dispute between their two nations during a meeting at the G20 in Japan.

Mr Trump said US companies would be allowed to sell their equipment to Huawei, and opened the door to further concessions later.

“We increase our odds of a deal over the next few months” to slightly more than 50 per cent, from 40 per cent prior to the meeting, TD Securities said in a note.

Mr Trump’s decision not to impose tariffs on the remaining $US300 billion more Chinese exports to the US “could spur a risk-on reaction as that tail risk gets priced out”, TD said, particularly in Chinese equities and the yuan.

Still, implementation and enforcement remain key sticking points for any deal. As well, TD said there was no timeframe set for further talks.

The truce should bolster sentiment for local shares as investors ahead of the Reserve Bank’s policy meeting on Tuesday.

The RBA governor’s view on the current state of the economy and policy is awaited.

NAB, for one, expects RBA governor Philip Lowe to announce a 25 basis point cut to 1 per cent tomorrow. “Governor Lowe has made it clear that the cash rate will likely be 1 per cent by August and we will take him on his word.”

TD Securities also is betting on a rate cut tomorrow, and given Mr Lowe’s comments last week, “not cutting [would] represent a major communications error in our view”.

(Source: Moore, T 2019, ‘ASX to open higher on US-China trade truce’, Sydney Morning Herald)

New Financial Year!

Well another financial year passes.

The Australian Share market – All Ordinaries Capital Index has risen from 6289 at the start of the financial year to 6699 a capital return of 6.50% for the year. Add to this average dividend yields of 3.50% – 4.00% and the overall return (capital and income) being just over 10% for the year.

Excluding risk for the moment then this return represents a significant premium over term deposits lucky to average 2.00% to 2.80% depending on the provider and fixed interest term and well above CPI Inflation of hovering around 2.00%.

Similarly to year ending 30 June 2018 it was a year of 2 halves where the six months to end of December 2018 was very ordinary (excuse the pun) with good recovery in the last six months of the financial year.

It all goes well for one of our most famous quotes when conducting information sessions, seminars, workshops and generally just talking to clients.

“NEVER LOOK LESS THAN A YEAR”

Moreover the share market seems to look after itself over any seven year cycle with a good consistent margin over CPI inflation as reward for taking on extra risk rather than investing purely in the more stable cash or term deposits.

For those a bit older will remember the October 1987 Stock Market correction when the overall market declined some 40% in just a few days. That was obviously terrible for persons entering the market with large lump sums in early October 1987 but for those persons who had been in the market for the whole calendar year the loss was only 8%.  However, importantly after the previous brilliant 4 years total returns (as shown below) but of course not sustainable with good recovery (although not brilliant) in the following years thereafter.

1984 13.5
1985 36.5
1986 42.5
1987 54.0
1988 -8.6

American Shares have also done very well (probably somewhat in light of low interest rates and the Trump Factor) but more on other WORLD MARKETS next week.

All Ordinaries (XAO) 5 Day Chart

Disclaimer: The advice provided is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

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The Rise of Ransomware – Are you Protected?

The Rise of Ransomware – Are you Protected?

The Rise of Ransomware – Are you Protected?

Ransomware has become an increasing problem particularly for small to medium businesses in the last few years with ransomware attacks being increased by 97 percent of the last 2 years (Source Phishme). Ransonware generates over $25 million in revenue from hacking organisations every year (Source Business Insider) and proves that this isn’t a problem that will just go away. Businesses in particular, need to act to ensure they have a clear understanding and action plan if effected by ransomware. A number of Preventative measures are available and will be outlined further in the article.

What is Ransomware?

Ransomware by definition is a form of malware/virus that prevents users accessing their systems or data until a some of money is paid to the attacker.
Below is an example of what the program looks like when the attackers have taken access to your data;

Notice that Bitcoin is the only used payment method, this is due to Bitcoin being incredibly hard to be traced and is therefore is the primary payment method for cyber criminals.

How Does Someone Become Infected by Ransomware?

Similar to any other malware, ransomware can often be prevented by proper protocols and procedures on the user’s end.

  • It can infect systems via email – when an unsuspecting user downloads a malicious link off an email which may run an executable program.
  • Ransomware can also be spread by an infected website where a drive-by downloading occurs when the user loads the page.
  • Social media is also another culprit when links are shared and opened by unsuspecting phone users, without thinking a lot of the time.

 

How can I / We Prevent Ransomware?

  • Make sure you have a strong anti-virus and firewall installed for each computer and this is kept up-to-date. Firewalls will prevent users opening sites that can cause harm, anti-virus software will scan for any infected files on your computer.
  • Install content filtering on your mail servers (Spam Filter), this will prevent a large portion of the inbound scam emails.
  • Regularly make sure all software and systems are up-to-date. A key way attackers can get attackers can get access is through out of date software.
  • Train users to be more aware of what dangerous emails and website look like so they can avoid dangerous links. Be sure to contact your IT specialist if you are unsure of any emails or links before opening them. There are also a number of great user training programs out there to help with this, Knowbe4 is one of the best.
  • Be aware that most financial brokers now offer cyber insurance which can cover a range of things including ransomware.

 

What About if I Become Infected by Ransomware?

For a start it is highly recommended that you do not pay the ransom, it only funds and encourages these attacks further when they are paid. Also, there is no guarantee you will get your data back even if you do pay (it is quite common for this to happen).

Make sure you keep regular backups of all necessary/sensitive data on your system. Although it can be pain to restore backups for a whole system (and some data may lost) it is the easiest method to getting around ransomware if your become infected.

If you need more information of help regarding ransomware to don’t hesitate our team at Plus 1 on 03 58333000 or via email to plus1@plus1group.com.au

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Transport Award Updates 2019/20

Transport Award Updates 2019/20

Transport Award Updates 2019/20

A version of the updated road transport and distribution award can be found here

Main Short Distance updated rates for 2019/20 are:  

Grade Minimum weekly pay rate Minimum hourly  rate
1 $784.60 $20.65
2 $804.30 $21.17
3 $814.20 $21.43
4 $829.20 $21.82
5 $839.60 $22.09
6 $849.20 $22.35
7 $861.60 $22.67
8 $886.60 $23.33
9 $901.50 $23.72
10 $923.80 $24.31

For further updates please refer to our website

If you have any queries or would like any further information regarding this matter, please contact our office on (03) 5833 3000.

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Long Distance Driver Update 2019/20

Long Distance Driver Update 2019/20

Long Distance Driver Update 2019/20

A version of the updated long distance driver award can be found here

Main Long Distance updated rates for 2019/20 are:

Grade Minimum weekly pay rate Minimum hourly drive rate Minimum cents per kilometre
1 $814.20 $31.75 $0.4234
2 $829.20 $32.34 $0.4312
3 $839.60 $32.74 $0.4366
4 $849.20 $33.12 $0.4416
5 $861.60 $33.60 $0.4480
6 $886.60 $34.58 $0.4610
7 $901.50 $35.16 $0.4688
8 $923.80 $36.03 $0.4804

Major rest break allowance payable when a driver sleeps overnight in the truck cabin has been changed to $40.44 for 2019/20.

If you have any queries or would like any further information regarding this matter, please contact our office on (03) 5833 3000.

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If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

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3% Wage Increase – 2019 Annual Wage Review

3% Wage Increase – 2019 Annual Wage Review

3% Wage Increase – 2019 Annual Wage Review

The Fairwork Commission has announced a 3% increase to minimum wages which will apply from the first full pay period on or after 1st July, 2019.

So, for example, if your pay week is from Wednesday to Tuesday, the new rates take effect on Wednesday 3rd July.

The new minimum wage will be $740.80 per week or $19.49 per hour.

This increase will apply to employees that get their pay rates from the National Employment Standards or a Modern award.

All employers should review their award/s to see if this increase affects your employees. The below link can be used to access the Fairwork website to find your award.

https://www.fairwork.gov.au/awards-and-agreements/awards/list-of-awards

There are also changes to penalty rates in some hospitality, pharmacy, fast food and retail awards from 1st July. For further information click on the link below to access the Fairwork ‘Penalty Rate’ changes update page.

https://www.fairwork.gov.au/pay/penalty-rates-and-allowances/penalty-rates-changes-2017

Your team at Plus 1 are available to assist if you require help in understanding the award changes.

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8:00am to 5:00pm

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If you need to get us documents quickly, access remote support, or the MYOB Portal click the button above.

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27 Welsford Street
Shepparton, VIC 3630

T: (03) 5833 3000
F: (03) 5831 2988
Email Us