We wrote about the Aussie retail sales data earlier in the week, just following up with some commentary from Warren Hogan, an economist whose work we follow.
Overall, he’s been on the hawkish side, worried about inflation, not seeing/feeling that it was coming down fast enough, and that overall the economy has been strong enough to question the “immaculate disinflation” narrative.
But his views on retail are quite clear. A reckoning, of sorts, for the Aussie consumer.
We agree, and are positioned accordingly, with no consumer discretionary on in the direct equity sleeves. There are some excellent businesses in the sector, and we can certainly see why others are willing to take an allocation on the consumer muddling through.
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