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January 22 2021 


1. What happens in lockdown…

Many discussions were had this week on how strong the global housing market continues to be. We have discussed in our weekly before how the combo of historically low interest rates + massive government stimulus has supported the housing sector, but it seems buying houses in lockdown has become the hottest thing to do, judging by the UK data! All boding well for related portfolio holdings including Virgin Money UK and James Hardie.

  • Aus: New house sales skyrocketed in December ahead of the HomeBuilder grant reduction
  • UK: November home price index surprised to the upside, as UK mortgage approvals are at their highest level in 13 years  
  • US: housing starts leapt 5.8% MoM in Dec, permits for future homebuilding jumped 4.5% MoM, whilst single-family homebuilding, the largest share of the housing market, spiked 12%. Single-family starts have now increased for eight successive months, and are at highest levels since September 2006. Single-family building permits rose 7.8% MoM, +30% YoY.


United Kingdom

US Housing Permits

Source: Bloomberg


2. “Jobs, jobs, jobs. Jobs is our focus”, said ScoMo…

More than 90% of jobs lost in Covid have now been regained in Australia, at a pace faster than economists expected. The ABS released data on Thursday showing the unemployment rate fell to 6.6% in December, down from 6.8% in November. The jobless rate fell as the economy added >50,000 new jobs and the participation rate climbed to a record high 66.2%, showing continued domestic market strength despite JobKeeper being wound back.

Source: ABS

3. Biden is in, and so is speculation..

As the US prepares for another round of stimulus, we reflected on what happened last time the government handed out $600 cheques…

  • A company that sounds like a word Elon Musk tweeted rose 1,100%
  • Tesla added $130 billion
  • IPOs doubled and options trading exploded…

Interestingly, across all income groups, check recipients traded roughly 30% more in the first 10 days of January than they did at the start of December, data from Envestnet Yodlee shows. Trading among those with annual incomes of less than $75,000 who received payments jumped 53%. Joe’s proposed stimulus plan will see more than 150 million Americans eligible for a $1,400 direct payment, on top of the $600 payments approved in December.