Friday Flashback

THE WEEKLY WRAP: The market finished on a high note last week for the third week in a row as the United States Federal Reserve decided to end stimulus and better than expected economic growth figures emanated from the land of the free to boost risk appetite in financial markets.

A share market dive on Monday could have been attributed to too many people paying more attention to organising office sweeps and funny hat days for the impending Melbourne Cup, however the blame was placed on softer commodity prices on the back of the worst Chinese manufacturing numbers in five months doing nothing to give the big miners much to cheer about.

The local bourse was swamped with quarterly reports as companies are required to put all their market announcements for the past three months in one file and resend them out as new.

The Melbourne Cup lived up to its motto and certainly stopped a lot of market traders, who opted instead to punt their daily allowances at the track, TAB, or wherever people choose to throw money at equine competition these days.

The Aussie Dollar ensured the German connections of race winner Protectionist would be able to bank more Euros when they get home by reacting badly to disappointing international trade figures showing Australia’s trade deficit widened significantly in September.

Away from Flemington, the Reserve Bank decided to leave rates steady at 2.5 per cent for the 14th consecutive meeting.

Reserve Bank governor Glenn Stevens and his Board either know what they’re doing or are just too lazy to change things by continuing the longest period of rates staying on hold for more than a decade, since the RBA sat at 4.75 per cent for 15 meetings in 2002-03.

The ABC reported the move was expected by all 26 economists surveyed by Bloomberg, with most not expecting rates to start rising until mid-2015 at the earliest.

The market was expected to rally on Wednesday when everybody returned to work, although it appeared more decided to take the day off in preparation for Oaks Day.

The recent consistent falls in the oil price haven’t done much to help with most energy stocks feeling the pinch.

It also seems that general market punters aren’t the only ones to be feeling jaded with a recent survey demonstrating a growing discontent with company directors now of the opinion the Federal Government does not understand business.

The survey was targeted at a more qualified bunch than the usual focus group questioned by Grant Denyer on Family Feud.

Some 500 board members surveyed by the Australian Institute of Company Directors (AICD) has found that more than 40 per cent now do not believe that the Federal Government understands business, while almost 40 per cent believe it does.

The survey also discovered almost half of directors now consider the Federal Government’s performance is negatively affecting their business decision making, and almost three-quarters noting a negative effect on consumer confidence. It’s always somebody else’s fault isn’t it?

As the G20 summit looms in Brisbane, national leaders in attendance are being put under pressure to really do something in regards to cracking down on international tax avoidance.

The Guardian Australia reported revelation that thousands of companies, including several major Australian firms and multinationals operating in Australia, have legally avoided tax with complicated deals negotiated through Luxembourg.

Big companies with highly skilled accountants and lawyers not paying the taxes they should be in any country where they choose to set up shop?

That’s too fanciful to believe, especially when all governments, of any persuasion, would be right on to any shenanigans.