Week in review
- RBA policy meeting minutes send hawkish message
- Eurozone composite PMI improves to 47.1
- U.S. composite PMI steady at 50.7
Week ahead
- Australia retail sales for October
- Australia monthly CPI inflation
- Australia private sector credit and capex
Thought of the week
The U.S. Thanksgiving holiday has somehow morphed into a global phenomenon for cheap consumer deals. The sales around this period have in the past been used as a barometer for U.S. households' attitude towards spending and in what price range. Consumption accounts for approximately two thirds of U.S. economic activity so can be an important driver of the overall direction of the economy. The resilience of the U.S. consumer in the face of both higher inflation and higher rates in 2023 is one reason why the U.S. economy has managed to avoid recession. What is surprising is that even as consumer confidence has fallen in the U.S., retail sales levels have held up. U.S. households may have continued to spend but are seemingly not happy about it. As inflation falls in the U.S. faster than wage growth in 2024 positive real wages should support the consumer, but they are under increasing pressure.
U.S. Consumers are not happy but kept spending anyway
University of Michigan consumer sentiment
Source: FactSet, University of Michigan, J.P. Morgan Asset Management. Data reflect most recently available as of 24/11/23.
All returns in local currency unless otherwise stated.
Equity price levels and returns: Levels are prices and returns represent total returns for stated period. Equity price levels and returns: Levels are prices and returns represent total returns for stated period.
Bond yields and returns: Yields are yield to maturity for government bonds and yield to worst for corporate bonds. All returns represent total returns. AusBond Comp is the AusBond Composite 0+ Yr, AusBond IG is the AusBond Credit 0+ Yr both provided by Bloomberg.
Currencies: All cross rates are against the Australian dollar. An appreciation of the foreign currency against the Australian dollar would be positive and a depreciation of the foreign currency against the Australian dollar would be negative.
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