Aus macro

The Westpac consumer confidence print was out, and, whilst it makes for fairly dismal reading (82.4, still fairly close to the lows observed during the darkest days of the COVID crisis), it continues to have seemingly no bearing on the economy, employment, or the market in aggregate.

Stocks are doing well, consumer facing stocks (retailers) have surprised more or less continually to the upside, and we’ve seen the unemployment rate remain at envious numbers. If you’d set your DAA compass to the winds of PMI’s or CC’s, you’d have been crunched.

Now, this hides a lot of what’s happening under the hood, the “per capita” recession, the fact that people dislike inflation, & that persistent + warm inflation provokes a degree of misery that these surveys capture, not to mention the dismay that stems from insecure housing.

We continue to fear some eventual comeuppance, from mortgage rates impacting the consumer causing a recession, & a more serious problem for the banks. However, it has assuredly not happened, and remains far more a “tail risk” to the mind of the market, than it does a base case.

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