Travel and hospitality stocks suffered “pretty badly” on Wednesday in anticipation of a lockdown announcement from Victoria says InvestSMART’s Evan Lucas.
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Questions raised over how a jobless rate below five per cent will be achieved 29/04/2021|4min
InvestSMART’s Evan Lucas says the “number one question” following Treasurer Josh Frydenberg’s major budget shift towards a jobless rate below five per cent is “how do you get there?”
“What was pre-pandemic, with what was discussed in the unemployment rate was … basically the rate to get to breakeven where there’s enough employment to start pushing at wages.
“Just to highlight what that number was, that was 4.5 per cent and we were a long way off it before the pandemic.
“We weren’t getting there before the pandemic, how are we going to get there in the current market with where we’re at?
Budget deficit to be better than forecast 22/04/2021|5min
InvestSMART’s Evan Lucas anticipates the deficit for 2021 will be $140 billion, ahead of May’s federal budget.
“Our view is that it will be better than the median forecast,” Mr Lucas told Sky News.
“It’s $71 billion better than what they forecasted.
“Iron ore is obviously the standout. It’s almost triple what they were expecting.
“Copper is up 86 per cent, if you look at crude (oil) it’s up over 100 per cent. Things like coal, it’s also up about 62 per cent.”
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InvestSMART’s Evan Lucas says the government’s $1.2 billion tourism and aviation package will have a small effect on the economy.
The program is designed to support pandemic hit travel and tourism industries after the Jobkeeper subsidy ends in March.
The centrepiece feature of the bill includes 800,000 discounted airfares which will be available from April 1 and additional routes which will be added to 13 tourism reliant regions across the country.
“I think it’s the step away from JobKeeper,” Mr Lucas told Sky News.
“It’s a step in that next direction. It’s not surprising, aviation is probably the biggest hit along with tourism.”
Mr Lucas said there will still be a decent amount of jobs lost.
“There will probably have to be some form of wage packages, particularly aimed at tourism.”
InvestSMART’s Evan Lucas says along with Japan, Australia is one of the “best performing” developed economies in the world after reporting an “incredible” economic growth of 3.1 per cent over the December quarter.
“It’s an incredible figure and it means the two quarters … was the best on record in terms of those two quarters of growth to se that kind of movement,” he said.
“We’re now only 1.1 per cent down from where we were.
“We are, in the developed world, along with Japan, the best performing developed economies on the planet.
“The next one outside of that is South Korea, they’re down 1.4 per cent.
“Everything else is down over 3 per cent or more”.