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April 23 2021

 

1. Back to the real world…

A few results this week have raised the question of how much of the 2020 covid boom / lockdown behaviour is short term/pull forward demand, and how quickly we may return to a ‘normal’ world.

The top chart below is Netflix subscriber growth. They announced this week that roughly 4 million people signed up for the streaming platform from Jan-Mar, way below the >6 million average projection of analysts. The stock subsequently sold off 11% on Tuesday. Meanwhile Uber said ride bookings in March hit record levels.

Closer to home, Kogan came out with a trading update this morning with EBITDA down 24% in 3Q. And Sydney Airport said March domestic traffic was +88%mom to a post covid high of 1.12m!

 

Source: Netflix, Bell Potter

 

2. The flow show…

We had a few people scratching their heads on last week’s Friday fun fact – as a reminder we noted US inflows to stocks over the past 5 months were $576bn, compared to US inflows to stocks over the prior 12 years totalling just $452bn!

So we’ve dug up some charts to depict what has been happening.

Updated numbers show there has been +$602B worth of equity inflows over the last 150 trading days starting on November 1st 2020 (day of the election and positive vaccine news). This equates to +$4 Billion worth of equity demand, per day, every day!

Also to note, looking back at the last 25 years, May is typically the first month of the year that seasonally registers net outflows. In 2021, Q1 and April have followed this money flow pattern.

 

Source: Bloomberg

 

Source: GS Research Division as of 4/20/2021. Arjun Menon. EPFR Global.

 

3. Confidence still high…

Post the run off of JobKeeper in March, we are yet to see a discernible impact on consumer confidence in Australia. And interesting broker data showing confidence is still strong in the stock market, with short interest in Australia sitting at a 6 year low (as far back as the data has been tracked). According to Bloomberg, the US short interest percentage is at a 17 year low!

Source: ANZ-Roy Morgan, Macquarie Macro Strategy

Source: Bloomberg, Citi