The new leadership team of the federal Liberal Party, Angus Taylor and Jane Hume, spent the weekend trying to clean the slate for the party. Taylor said under his leadership the Liberal Party would contain inflation and taxes would be lower. He said standards had been too low on immigration and the numbers too high. Taylor also criticised PM Anthony Albanese for not condemning those who openly called for violence during protests last week. Senator Hume conceded that opposing previous tax cuts and work-from-home arrangements was a mistake. She wouldn’t be drawn on potential changes to tax breaks, such as the CGT concession for property investors. The first opinion polls since Taylor and Hume replaced Sussan Ley and Ted O’Brien on Friday shows One Nation and the Coalition both with 23pc of the primary vote. The Resolve Political Poll, in Nine media, suggests voters are willing to give Taylor a chance.

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News in brief

Macquarie Group is reportedly close to buying logistics player, Qube, for $11.6 billion, removing yet another infrastructure player from the bourse.

At different times of the day, solar panels are too productive, flooding the national grid with energy, which threatens to trip the grid. Now the energy regulator wants powers to switch off household rooftop panels, but some state governments aren’t happy.

The auction market continues to ramp up as we head toward the autumn selling season. The preliminary clearance rate held above the 70pc mark for the second week running, though was down a bit on the week before.

Wall Street is experiencing an anything-but-tech vibe. In the US, supermarkets, energy companies and manufacturers have done well but not the Magnificent 7 tech stocks. The Mag 7 are down 7.2 per cent this year, versus the Nasdaq falling three per cent and the S&P500 flat.

Several Democratic politicians in the US have rushed to assure European leaders that Donald Trump will be gone in three years, and things will get back to more normal times.

Fear-o-meter

AMP chief economist Shane Oliver on reporting season:

It’s early days in the Australian December half earnings reporting season with only about 20% of major companies having reported.

The consensus expectation is for earnings growth of 11.7% this financial year mainly driven by a 30% surge in mining sector profits, with banks seeing around 9% growth, energy seeing a 19% fall and the rest of the market seeing profit growth around 6%.

So far results have been consistent with this with more than normal upside surprises and more companies reporting profits or dividends up on a year ago compared to what was occurring in 2023 and 2024.

This helped the share market rise over the last week, but it was a messy ride with more companies seeing their share price fall on announcement day than rise whereas in the June half reporting season it was the other way around.

The outsized negative share price reactions even to strong results highlights just how much good news has been factored into share prices. Just bear in mind too that there is a tendency for companies with good results to report early so results may soften over the next couple of weeks.

Fear & Greed Q+A today

On the week ahead for the economy, including wages, labour force data and the minutes of the RBA board, plus an explainer on the wage price index and why a wage price spiral is so unlikely:

 

“We haven’t really had one in Australia for decades, frankly. It’s this lingering memory of the 70s, 80s and even the early 90s. The way that it works was when a business passed on a high wage increase that had no productivity component, they would increase their selling prices to cover that labour cost increase. Higher selling prices is inflation. Then as a worker you’d see this higher inflation and say, hey, my cost of living has gone up so much, can you give me a pay rise to compensate? And if the boss was in a protected industry without much competition and productivity was lousy, yeah, we’ll give you the pay rise — and so the spiral goes. That was broken largely in the 90s when we moved away from automatic wage indexation.”

Greed-o-meter

Sussan Ley isn't the shortest-serving Opposition Leader to have been rolled by her own party - that honour goes to Alexander Downer, who spent 252 days in the job before being succeeded by John Howard in 1995.

Source: Nine newspapers

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