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1. Consumer crack/ing…

It was tough in consumer land this week, with weak trading updates from the likes of JB Hi-Fi, Super Retail and Baby Bunting. Westpac data also reconfirmed it is the younger consumer that is feeling the cost-of-living pressures the most, with 20-24 year olds dropping spending on discretionary items by nearly 5% in the year to March, and 25-34 year olds decreasing spend by over 5%.

Meanwhile the weighted-average interest rate on outstanding home loans in Australia has surpassed 6.08%. And the median rent in Australia has surged to a record high of $627, according to CoreLogic, with rents now 8.5% higher than this time last year.

Source: Westpac, Barrenjoey (May 2024)

Source: National Sources, Antipodean Macro (May 2024)

2. Eyeballs on employment…

Unemployment has been a key data point for the market in debates over the direction of interest rates.

In the US this week initial jobless claims spiked to 231k, versus 212k expected, the first sizeable miss in several months and the highest reading since the middle of 2023. The US unemployment rate has remained below 4% for 27 months straight, the longest streak since the late 1960s.

In Australia we have seen unemployment start to tick up for younger workers, but we note this cohort has also seen the strongest increase in supply via population growth.


Source: Charlie Bilello, Creative Planning, Evans (May 2024)

Source: ABS, Antipodean Macro (May 2024)

Source: ABS, Antipodean Macro (May 2024)

3. How about the weather

The rising climate volatility is fuelling demand for weather derivatives – instruments used to hedge against the risk of weather-related losses. Average trading volumes for listed products jumped more than 260% in 2023, according to CME, with the number of outstanding contracts up 48%. It’s good news for Ryan Specialty, a holding in our S3 Global Opportunities Fund, who specialize in complex areas of insurance, like weather.

Source: CME, Bloomberg (May 2024)
Companies mentioned are illustrative only and not a recommendation to buy or sell any particular security.​​​​​​


This article is prepared by Firetrail Investments Pty Limited (‘Firetrail’) (ABN 98 622 377 913, AFSL 516821) as the investment manager of the Firetrail Australian High Conviction Fund (ARSN 624 136 045), the Firetrail Absolute Return Fund (ARSN 624 135 879), the Firetrail Australian Small Companies Fund (ARSN 638 792 113) and the Firetrail S3 Global Opportunities Fund (ARSN 653 717 625) (‘the Funds’). Pinnacle Fund Services Limited ('PFSL') (ABN 29 082 494 362, AFSL 238371) is the product issuer of the Fund. PFSL is not licensed to provide financial product advice. PFSL is a wholly-owned subsidiary of the Pinnacle Investment Management Group Limited (‘Pinnacle’) (ABN 22 100 325 184). The Product Disclosure Statement (‘PDS’) and Target Market Determination (‘TMD’) of the relevant Fund are available via the links below. Any potential investor should consider the PDS and TMD before deciding whether to acquire, or continue to hold units in, the Fund.

Links to the Product Disclosure Statement: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

Links to the Target Market Determination: WHT3810AU, WHT5134AU, WHT3093AU, WHT7794AU

For historic TMD’s please contact Pinnacle client service Phone 1300 010 311 or Email

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