CBA spending, BBN, and consumer confidence
Spending intentions are down but yet to “hard stop”, which is what we expect as rates bite.
Despite sounding like a broken record, we just can’t go and buy consumer discretionary/retail when we think a large slowdown is coming.
A casual glance at the BBN forecast NPAT (which increases)…
…versus the trading update in which quarterly profits on PCP appear to be down (a decrease)…
…explains the share price weakness today. As per our note above, we do expect spending at the household level to decrease. BBN is probably not what we have in mind, but it still points to households being price sensitive, which producers are responding to, leading to increased competition.
It is still bleak out there by reported emotion, but actual spending remains high (as we saw with both retail sales and the CBA intentions). Falls are, however, coming.
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