A magnificent set of numbers, overall.
But you can see the problem. Labour data looks like this…
…inflation data looks like that.
Plenty of supply-side enhancing dynamics at work. A strong economy bringing in eligible workers from all parts of the economy. Incidentally, great for the childcare companies.
All that said, the issue for Australia remains this almost circular concern of over-heated housing, over-levered households, imperilled by rising rates brought on by an economy operating above potential, which has material sectoral implications (e.g. for banks and property).
We remain underweight the banks, although we are tempted to narrow the underweight (around 500bps UW the banks). However, we will resist this temptation, and remain with our over-weights to the insurance companies (which are trading quite weakly today, more or less giving back the gains of yesterday, as bond yields bounce around).
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This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.
Please note that past performance is not a reliable indicator of future performance.
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