1. The certainty of tax cuts…
Stage 3 tax cuts are coming in 16 days! If you earn $100k, you will receive $2,179 per year extra! And the benefit is set to cap out for anyone >$190k at $4,529 per year in extra disposable income. Morgan Stanley have done some work on the median change in annual growth across sectors post a tax cut below. Gambling, travel and recreation goods appear to be the beneficiaries, which does bode well High Conviction and Absolute Return Fund holdings like Tabcorp and Flight Centre.
Source: Morgan Stanley (June 2024)
Companies mentioned are illustrative only and not a recommendation to buy or sell any particular security.
2. Holding down the fort…
The share of employed persons holding multiple jobs in Australia has returned to all-time highs.
Source: ABS, Macrobond, Macquarie Macro Strategy (June 2024)
3. Burgeoning buybacks and slowing splits…
Corporate buyback activity is picking up. Corporate client buybacks last week were the second-largest in weekly history since 2010 according to BofA. But stock splits have gone out of fashion, unless you’re Nvidia!
Source: Bank of America Global Research (June 2024)
Source: Goldman Sachs (June 2024)