Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), and CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data and charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, and author of the New York Times bestsellers 'End Game' and 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - & author of Things That Make You Go of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, MacroBusiness.

Saturday, 10 January 2015

Retail Gains for 6th Month

Retail for November

The November 2014 Retail Trade figures were released today.

After strong gains in September (+1.3 percent) and reasonable gains in October (+0.4 percent) a softer month was forecast by analysts, and that's what we got with a +0.1 percent seasonally adjusted increase in turnover.

Retail turnover

In trend terms the last three months have recorded gains of 0.4 percent, 0.4 percent and, erm, 0.4 percent respectively.

In seasonally adjusted terms November was the sixth consecutive month of retail turnover growth taking annual growth to a shade over 5 percent.

Zooming in the data shows the seasonally adjusted shape of the chart in recent months.

Nothing too dramatic over the last year - either good or bad - just a solid 5 percent increase.

State level

The long run state data shows that New South Wales has been the leader for this cycle, with retail trends generally softer elsewhere.

For reasonings what I ain't been able to fathom, the retail figures for the ACT appear to have gone bazinga for the last three months, with another 1.3 percent rise in November.

That doesn't seem to make a lot of sense given recent adverse developments in the Canberra labour market - probably just a quirk of the data sampling reversing out declines in the preceding months, one might assume.

Surprisingly Tasmania (+1.1 percent) and the Northern Territory (+1.6 percent) also enjoyed a very strong month in November.

Nevertheless on balance the annual figures are likely to give a clearer picture of what is happening, with the New South Wales economy standing tall above the rest, and Victoria next up. 

This is the fabled "wealth effect" at work, of course - rising house prices in Sydney and Melbourne have increased consumer confidence enough for folk to get out there and spend a bit more.

Industry gainers

One of the strongest retail industries over the past year has been household goods, recording booming year-on-year retail turnover gains of around +11 percent.

This also clearly reflects the strong state of the housing market in 2014.

Food retail - which despite being costly Down Under continues to be quite popular - has been another outperformer at +6 percent. 

It was also heaterning to see that the cafes, restaurants and takeaways data resumed its decade-long uptrend - piling on yet another +6 percent annual growth, this month's gains being entirely driven by takeaway food.

This nugget adds a little further weight to my as yet unpublished thesis that the average Australian has not cooked a proper meal in Australia since around the time of the Sydney Olympics.

The Wrap

A softer month for retail in November which will reignite talk of further interest rate cuts. 

Interest rates have been on hold for so long now - since 6 August 2013 - that virtually everyone has had their say as to whether rates should stay on hold or be cut further.

I have long believed that with the trimmed mean and weighted median inflation readings appearing likely to slide to the bottom of the target 2-3 percent range and unemployment continuing to rise to 6.3 percent, then answer is simple - the next move must surely be down.

But then I would say that. Hailing from a part of the world which has been dogged by unemployment and the demise of its only two major industries, I have an unhealthy obsession with putting the metric of unemployment above all others.

The rhetoric of the Resereve Bank's Governor suggests that stability is the favoured order of the day - fair enough.

Futures markets appear to have spoken anyway.