1. Riding the immigration wave…
One of the hot topics at the Macquarie conference this week was immigration.
Dexus said FY23 is set to be the highest level of migration sine 2008. While Mirvac are touting 450k net visa arrivals in the 12 months to March 2023. Medibank are also seeing a strong recovery in international students and workers in Australia.
Source: Dexus
Source: Medibank
2. The big dipper…
House prices were up +0.7% in April nationally, with Sydney bouncing up +1.3%. This came after the RBA paused it’s tightening cycle though, so we wait to see what the May raise means. But that immigration wave surely wont help…
Source: CoreLogic, Goldman Sachs Global Investment Research
3. It’s an AI world, and we just live in it…
The team have enjoyed testing out the new AI chatbots like Bard and Chat GPT in our spare time. But it seems they are already having bigger impacts on the world.
Chegg has been the first public company to blame AI (Chat GPT in this case) for a downgrade. Chegg is an online educational platform in the US. Gross user adds disappointed the market this week after students realised they can just use Chat GPT for free instead. IBM has also paused hiring for back office jobs, and said ~30% of jobs could “easily” be replaced by AI in 5 years.
AI has also helped us gauge the real sentiment from the Fed. If you run the Fed minutes through a natural language processing model, it shows the Fed is starting to turn more dovish (see first chart below). And earnings transcripts mentioning AI or Machine learning have spiked amongst S&P500 companies in April. If you were counting, Mark Zuckerberg (Meta CEO), Sundar Pichai (Google CEO), Satya Nadella (Microsoft CEO), and Andy Jassy (Amazon CEO) mentioned AI a total of 168 times during their recent earnings calls.
Source: Apollo
“AI” or “Machine learning” mentioned in earnings transcript
Source: Kantro (2023)