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ASX to slide as Morrison flags 'fiscal discipline' strategy

Lucy Dean
·3-min read
CANBERRA, AUSTRALIA - JUNE 12: Prime Minister Scott Morrison listens as Treasurer Josh Frydenberg speaks at the despatch box during Question Time in the House of Representatives at Parliament House on June 12, 2020 in Canberra, Australia. The government last month promised to repay $720m to 373,000 past and present welfare recipients over 470,000 unlawful demands for money calculated using faulty “income averaged” annual pay data as part of Centrelink’s income compliance program. New polling has showed significant support for a royal commission into the debacle, and revelations that internal estimates have shown the total value of those 470,000 unlawful debts will be close to $1.5bn AUD.  (Photo by Sam Mooy/Getty Images)
(Photo by Sam Mooy/Getty Images)

Good morning.

Here’s Yahoo Finance’s morning wrap for Monday.

ASX: The ASX is set for an uninspiring start to February after a soft lead from Wall Street on Friday. ASX futures are suggesting a 0.5 per cent drop at the open as GameStop continues to pose questions globally.

Wall Street: US markets finished January with their biggest weekly fall since October as Johnson & Johnson revealed its vaccine had a 66 per cent efficacy. Investors were also concerned over the GameStop squeeze.

The Dow Jones Industrial Average fell 620.74 points, or 2.03 per cent, to 29,982.62 on Friday, the S&P 500 lost 73.14 points, or 1.93 per cent, to 3,714.24 and the Nasdaq Composite dropped 266.46 points, or two per cent, to 13,070.70.

Morrison’s warning: The Prime Minister has said Australia needs to exercise “fiscal discipline” as he prepares to end the JobKeeper and JobSeeker support mechanisms. Here’s what he has to say.

Jobs data: Treasurer Josh Frydenberg is also mulling what the end of JobKeeper will mean, noting that there is “a lot of uncertainty” in the future. He wasn’t able to rule out that unemployment will hit 7.5 per cent in March once the two payments end.

Vaccines: The Government has pledged $1.9 billion to rolling out the COVID-19 vaccine. It expects to have every Australian vaccinated by October this year. More here.

GameStop: The GameStop short squeeze has dominated conversations in the last few days, and according to one expert, it’s a big wakeup call for the sector.

“Seeing this mass chat room chatter do something that we've never seen before is a little bit reminiscent of the Yahoo chat boards from the 1990s. But this is something totally different,” Kevin Simpson, portfolio manager at Capital Investment Management, told Yahoo Finance Live.

Stephen Colbert: Talk show host Stephen Colbert has also taken aim at Wall Street traders, describing the response to the GameStop squeeze as hypocritical. Here’s what he had to say.

Camping: Would you give up hot showers, modern comforts and flush toilets for a tax deduction? The camping and caravanning body thinks so, and is currently pitching for camping to be a tax deduction in a bid to return the tourism industry to strength.

Tourism plan: It’s something that’s also on the Government’s mind. It’s just released its $5 million tourism advertising blitz.

China: Trade Minister Dan Tehan has admitted that China is not responding to his letters as the trade tensions between the two countries continue.

15 jobs: And are you ready for a career change? These are the 15 highest-paying jobs of the future.

Have a great day.

With AAP.

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