CEO to make Magellan great again and Liz Truss calls it quits: What we learned this week
Albo soft launches the federal budget, Dahmer series pumps Netflix numbers and Elon to terminate Twitter staff.
Mentioned: Magellan Financial Group Ltd (MFG)
CEO vows to return Magellan to its glory days
On Thursday, Magellan’s CEO and Chief Investment Officer David George spoke at the company’s annual general meeting reassuring shareholders that Magellan (ASX:MFG) will grow its funds under management.
“Through growth of our existing strategies and new products, I believe we will be a fund manager of global scale once more with over A$100 billion of funds under management after five years,” he said.
He cited the strong balance sheet and capacity to return to AUM growth. George also clarified that the growth to come will be more diversified in nature as Magellan moves away from its reliance on the global equities business.
He sees the company offering a diversified range of products that are attractively positioned in growing segments to meet client demand.
Federal budget spoilers
On Friday, Prime Minister Anthony Albanese spoke about the upcoming budget that will be delivered on Tuesday. In his address he announced a $50 million commitment to the development of critical minerals. The funding fulfils the promise of a National Reconstruction Fund made by the Labor party during the elections earlier this year.
“We have some of the world’s best reserves of critical minerals and it will set a new vision for the sector and complement other initiatives including the national battery strategy and the electric vehicle strategy which we are rolling out,” says Albanese.
He also addressed the elephant in the room, cost of living. He expressed the importance of the budget working in tandem with monetary policy in order to curtail rising inflation.
“What you need to do is have fiscal policy – that is the budget – that works with monetary policy. Otherwise, they are working against each other, you end up with sending the wrong message to central banks about what action you are taking,” he said.
Is Netflix back?
US streaming giant Netflix provided investors with a third quarter earnings update on Tuesday showing that the company’s revenue, operating income and membership all exceeded forecasts for the quarter.
Overall revenue grew 5.9% on a yearly basis which was driven by a 5% increase in average paid memberships amid the company's launch of successful new series such as 'Monster: The Jeffrey Dahmer Story' and Stanger Things season four . Earlier in the year the company was struggling with subscriber losses which resulted in the share price tumbling 29% over the month.
However, in a letter to its shareholders, the company claims that after a challenging first half, they are on path to reaccelerate growth. Netflix is current trading at $268.16 after rallying 16% on Tuesday.
Musk to slash staff
After cutting staff at Tesla earlier this year, technology billionaire Elon Musk is planning to do the same at Twitter. According to documents obtained by the Washington Post, Musk is planning to reduce staff numbers by almost 75% to just over 2000 employees versus the current 7500. Musk told investors earlier this year that in his initial pitch for funding he planned to downsize staff at Twitter.
It's alive! Japanese inflation rises from the dead
Japan has avoided the rising levels of global inflation. Core inflation in the country had only become positive in September last year after 12 months of deflation.
This week inflation in Japan rose from the dead hitting 3% for the first time in over three decades excluding tax-hike impacts.
Despite the rise in inflation, it is expected that the Bank of Japan (BoJ) will continue to move forward with monetary easing. It is likely that BoJ governor Haruhiko Kuroda will wait for wages to rise before any policy changes are made.
Liz Truss resigns
Liz Truss resigned from her role as British Prime minister on Thursday after only assuming office at the beginning of September. After delivering a disastrous budget, Liz Truss was seen to have lost all control over the government.
The promised debt-funded tax cuts in last month’s mini budget sent shock waves through financial markets as the sterling fell sharply against the US dollar. The tax cuts were later walked back by new chancellor Jeremy Hunt.
Following her resignation, the Conservative Party has confirmed that a leadership election will be held to determine the new prime minister by October 28.
What we are watching:
- Wednesday: Australian inflation data
- Thursday: US GDP growth rate
