Retail therapy
Weak retail sales data is just the latest sign that the economy is struggling, but investors are still pushing the ASX to new heights in anticipation that rate cuts will come sooner rather than later.
The canary in the economic coal mine is singing off-key. And forward-looking sharemarkets seem just a little bit complacent about it.
On a day when the ASX touched fresh record highs, new data showed that retail turnover is falling sharply. The latest statistics show a 2.7% decline in December, far below the consensus expectation of a 1.7% drop.
As Capital Brief has reported, households are tightening the purse strings as high inflation and rising interest rates take effect. That’s an intended outcome from increasing rates to tackle inflation.
And one of the first expenses to get crunched when the economy starts to slow (and people have less cash) is fun money.
