VanEck prepares for a decline in consumer spending | So Good News
VanEck expects to see a decline in consumer choice companies as the cost of living increases and consumer spending declines.
Inflation reached 7.3% in the September quarter and is expected to rise to 7.75% by the end of the year, according to Treasurer Jim Chalmers.
Although this did not affect consumer spending, VanEck was wary of future declines.
Cameron McCormack, portfolio manager at VanEck, said: “There are very few signs that inflation and inflation have eased consumer spending. Home and property prices rose 3.2% and 2.8% in the September quarter.
“While the Australian consumer may be pessimistic, spending is still surprising. We expect a significant reduction in spending and suggest that the public will be more fattening for well-thought-out companies such as JB Hi FI, Harvey Norman and Super Retail Group.
JB Hi-Fi fell 19.8% in the six months to 31 October, Harvey Norman fell 17% and Super Retail Group, which owned brands such as Rebel and Macpac, fell 2.6%.
However, VanEck was optimistic that the ASX would outperform its US and European counterparts as Australia had lower inflation and higher prices.
Since the beginning of the year, the ASX 200 was down 10% while the S&P 500 was down 18% and the German DAX was down 17%.
“We expect the Australian market to continue to outperform the US and European markets. Low inflation, rising wages, rising commodity prices and the RBA’s ability to impose a tighter policy as most mortgages are volatile give Australia a chance to find a smaller space.” “