This week on Equity Mates

Hey there Equity Mate,

Over the past 18 months we’ve all become interest rate watchers and macro forecasters as we try and predict the future direction of interest rates. Unfortunately, the ABS had some bad news for us yesterday: inflation for the 12 months to May 2024 was 4%, up from 3.6% in the 12 months to April 2024.

Basically inflation is moving the wrong way.

Before the data was released, markets suggested a 13% chance of the RBA raising the cash rate by September. After the data was released, that rose to a 59% chance. So don’t be surprised if we see one more rate rise in the coming months.

While we await the next RBA meeting on the 6th of August, here’s what is in your podcast feeds this week:

Equity Mates Investing (Spotify | Apple | YouTube)

• Monday - Audinate: Is it a buying opportunity at these levels? | Company deep dive

• Tuesday - Expert: Tim Samway - The new frontier of private equity

• Thursday - Eli Lilly: The greatest drug of all time? | Company Deep Dive

• Friday - Expert: Claire Smith - Bryce is on the hunt for a private equity manager

Get Started Investing (Spotify | Apple | YouTube)

• Tuesday - Fees: What we pay and what we NEVER will | Financial Check-up

Your questions, answered

Ann asked via Equity Mates Facebook discussion group:
“You likely get this question a lot, but I have some spare cash. Should I put it in my offset account, or is it better to invest?”

There is a mathematical answer to this, however it’s important to realise the the power of the offset account, if you’re a borrower. We go through it in a bit of detail in the video below, but here’s an example of the impact of an offset:

$20,000 in an offset account, with a mortgage of $500,000 at 6.01%, will save you $90,330 in interest, and you will pay off you loan 2.5 years faster.

If you have a question you’d like answered, hit us up at [email protected] 

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What we’ve been reading

Qantas drops out of top 20 airline rankings as world’s best named

We’re getting to that time of the year where Instagram should come with a FOMO warning. Many of our friends, family members and random influencers we followed for some reason are going to jet off for warmer climates of Europe.

Let’s just hope their not flying Qantas. Australia’s national carrier has not covered itself in glory over the past few years. From losing luggage, cancelling flights, not advising customers of their entitled refunds and lobbying the government to block competitors, Qantas has seen its reputation suffer over the past few years. Now the aviation industry has officially recognised Qantas’ fall from grace.

Skytrax have announced this year’s top airlines, with Qatar Airways taking out the #1 spot and Singapore coming in second. In Australia and the Pacific, Fiji Airways was awarded number 1. Qantas, on the other hand, dropped seven spots globally to be the world’s 24th best airline.

This is a massive fall from grace for the airline that was ranked second best in the world in both 2005 and 2006.

Meanwhile, Qantas’ low cost carrier Jetstar has also fallen in the ranking, down to 75th from 69th last year. With Qantas CEO Alan Joyce resigning last September and the Qantas Chairman Richard Goyder following him later this year, it seems like the new Qantas team of CEO Vanessa Hudson and a yet-to-be-announced Chairperson have their work cut out for them.