Aus macro/Judo bank PMI’s

All looking very soggy, on the domestic front via flash PMIs for June. All were below consensus.

The strength of conviction oscillates a lot here, but still, I think Australia is running a risk with h/h indebtedness, mortgage rates, and the economy going off the rails, all the while it has a massive housing shortage.

Also worth noting the survey data would not have made you any money at all, these past few years, if you based your asset allocation upon them, to any great degree. Look at the ASX 200, in contrast to the graphs above, below, around it.

And that makes life very difficult. You’ve got data that screams “important, look at me”, that hasn’t mapped very well onto “hard” data (macro aggregates like consumption and GDP and employment have definitely held up vastly better than the survey data) and least of all the stock market (for example, where the consumer stocks have done superbly!).

It’s the sort of market that makes you capitulate your long held views, only to see them arrive just as you change your allocation. I think that is the number one risk to guard against.

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