Retail Stocks

[Waltzing]

AUS inflation still sticky ...

https://www.smh.com.au/business/markets/asx-set-to-drop-nvidia-rebound-boosts-wall-street-20240626-p5jork.html

[KW]

Consumer spending in New Zealand (including both residents and visitors) rose by 0.8% for the second consecutive quarter, led by a rise in online shopping.

As Westpac senior economist Michael Gordon put it:
"There was one detail of interest: consumer imports of low-value goods have skyrocketed in recent times, up 50% in the last year and up 20% in the March quarter alone. This probably reflects the impact of new entrants to the New Zealand market, and provides a counter to the weakness that we're seeing in retail stores."
Gordon doesn't stray into speculation about retail market trends. But it sounds suspiciously like the Temu effect. The Chinese online shopping giant has seen enormous worldwide growth in the past year. According to the website Techreport, the Temu app had been downloaded 235 million times (as of last October).
It did sales of US$18b ($29b) last year and is targeting US$60b. Temu effectively cuts out that middleman and allows people to buy cheap Chinese goods directly from suppliers.
That's got to be a worry for low-cost retailers like The Warehouse. The NZX-listed company has blamed tough economic conditions for its recent woes. But when people look to cut costs, that often means buying cheaper goods. In the past, The Warehouse has done quite well in recessions. At the peak of the GFC, from September 2008 to October 2009, its shares rose 37%.
I'm sure the issues at The Warehouse are complex but this big structural change in the way people are shopping for cheap Chinese-made goods can't be helping things.
https://www.nzherald.co.nz/business/inside-economics-the-temu-effect-buried-in-gdp-data-the-shocking-cost-of-building-houses-uks-nasty-inflation-surpriseand-why-we-might-be-in-for-the-same/JG3VHVLR5BD4FDEMAWCUXKNWF4/

[Waltzing]

https://www.cnbc.com/2024/06/28/us-treasury-yields-ahead-of-pce-inflation-data.html

inflation  ...

sometime its nice to actually see what your buying when it stuff like towels other stuff ...  its always a risk like buying from Trade tested...

in the end you wished you had talked to someone with some experiance with the product and could actually rattle the thing about a bit... NA its junk after all...

[Waltzing]

CNBC some commentator predicts a boom in the next 4 years for markets based on strong private sector balance sheets compared to governments..

This crisis being the opposite of the GFC and was the inflation spike  predicted by an reserve banks ..

Did they in fact overreact draining to much money from the economies forcing a rapid contraction in consumer spending... not a soft landing then..

more like a panic in late 2022 that the reserve banks did not want to signal to the markets...

Retail to bounce back in 25-26 then...??

 

[Waltzing]

Screaming for a rate cut ...

https://www.interest.co.nz/economy/128521/some-economists-are-weighing-earlier-interest-rates-cuts-after-nzier%E2%80%99s-business

[KW]

Australian retail trade rose 0.6 per cent in May, compared to a rise of 0.1 per cent the previous month. The consensus was for a 0.3 per cent month-on-month rise.
Year-on-year, retail trade was up 1.7 per cent versus 1.3 per cent for April.
Robert Ewing, ABS head of business statistics, said the figures were boosted this month by shoppers taking advantage of early end-of-financial year promotions and sales events.
"Retail businesses continue to rely on discounting and sales events to stimulate discretionary spending, following restrained spending in recent months," he said.
"Despite the seasonally adjusted rise, underlying spending remains stagnant with retail turnover flat in trend terms. Compared to May 2023, trend is only up 1.5 per cent."

[Waltzing]

ROD says he far from finished and is planning to expand!!!

well IKEA , Kmart and TEMU have already smashed BRISC share price although it may well have bottomed here...

But scrap metal merchants like TRA may well be T crash immune...

https://www.nzherald.co.nz/business/briscoes-rod-duke-on-how-he-changed-nz-retailing-and-why-he-hired-the-briscoes-lady-money-talks/TQAEBXJXDFCWDOGQ7LZBZS236E/

this man just does not seem to know when to throw in the towel...

[Waltzing]

bleak ...

but maybe everyone is going to shift some part of there operations to AUS as it just makes ecomomic sense .. house prices rising over there already ....

https://www.nzherald.co.nz/business/company-insolvencies-and-liquidations-up-474000-people-now-behind-on-payments/ZAXVSF45WVGITDZ7QNL4TLUXSU/

[Waltzing]

alarm bells! shes going down by the bow !!!

https://businessdesk.co.nz/article/economy/rbnz-could-hint-cuts-may-come-sooner

they havnt got a clue ... https://www.youtube.com/watch?v=NpYEJx7PkWE

no apparently they cant see the water sloshing around their shoes ...

https://www.interest.co.nz/economy/128524/reserve-banks-likely-cheerfully-ignore-growing-clamour-some-public-indication-when

Interesting that the economy has been here before back in 2005 - 2008 but this time the stock market has priced in a mini GFC and has the market over reacted bumping retail and commercial property only to find in 2 to 3 years it has repriced again and people missed the bottom... which is about now...

[winner (n)]

RetailWatch report June sales were 8% down on June lastbyear

Of note -

Department stores down 21%
Clothing/Footwear down 16%
Furniture/Appliances/Homeware down 12%

Online and Instore down about the same ...but Online Domestic down more than Online Offshore

[Basil]

Those are huge drops.  Consistent with a very hard landing for the economy.  Hope Orr at RBNZ is taking notes.

[Waltzing]

will be interesting to compare the data over the next 2 years from this point in NZ compared to AUS....

many thanks for the stats ...

https://www.youtube.com/watch?v=pAuTR2vrI3g

[Waltzing]

Hard landing well that what is what you get when you send something up that fast and then stick it to the economy ....

[Waltzing]

Ok "in Tatters"!!!  right !!!

"Singapore-based Abhijit Surya, of Capital Economics, also sees the economic downturn deepening sharply and forcing a November cut.

"To be sure, the bank will probably strike a hawkish tone out of an abundance of caution. However, with the economy in tatters and inflation on its way back to the RBNZ's 1-3% target, we still expect a pivot to policy easing by year-end," Surya said."


https://www.nzherald.co.nz/business/official-cash-rate-ocr-decision-reserve-bank-to-make-its-call-at-2pm/WS5WCV2RFFHPBA36XFJWLU6RI4/


Tatters people ... TATTERS!!!!

[Waltzing]

"Stephen Toplis, head of research at BNZ, said the survey showed inflation had been beaten and virtually "screamed" for monetary policy to be relaxed sooner rather than later.

The same data caused economists at ASB Bank to shift their forecast for interest rate cuts to begin this November, instead of in February next year.

Nick Tuffley, the bank's chief economist, said unnecessarily damaging the economy and employment levels had overtaken inflation as the biggest risk facing the RBNZ."

https://www.interest.co.nz/economy/128664/reserve-bank-new-zealand-has-held-official-cash-rate-550-noted-policy-may-be-hurting


How to blow up an economy in 5 easy steps ...