Aus macro/retail sales

Retail sales

That is not a healthy string of numbers, for the Aus retail sales data.

Ups and downs, lurchy, for want of a better term. Mortgage rates, cost of living, all biting in the background making life harder for the consumer.

I am surprised the sector is not down by more, although fair to say those in the green below are at the less pointy end, with the exception of BAP, where I suspect things will not be so rosy.

I continue to think this’ll only get serious if one of the biggies downgrades, e.g. a JBH. I am absolutely worried about the outlook for Australia, and think our vulnerability to rates is very high (that is, the transmission mechanism for monetary policy) and we are relatively defensively positioned within Aussie shares, as a consequence.

That’s the sort of crack (a JBH downgrade) that would convince you the retail apocalypse has arrived. Insolvencies, & the unemployment rate, we think continue to drift higher, but again, it’s all been a bit like waiting for Godot.

Last weeks’ evidence on inflationary pressure surprised me, in that it didn’t look more like Canada or NZ, where things are overshooting to the downside.


Note Bapcor going into trading halt, pending a trading update, and news that their CEO will not in fact be joining them.

That is a red flag if ever there was one (noting some great reason may yet emerge, we are always mindful of that), particularly given the mix of a) recent-ish downgrades b) management turnover c) the surprising bounce in the share price, driven by talk in the market of a takeover bid waiting in the wings.

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