Three things that got the team talking this week - Firetrail Investments

Weekly insights from the Trail

Three things that got the team talking this week

February 17, 2023February 24th, 2023

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1. Consumer watch…

The US economy seems determined to spur the Fed’s efforts to slow it down. Total Bank of America credit and debit card spending per household was up 5.1% YoY in January, versus 2.2% YoY in December. And the NY Fed quarterly report on household debt and credit showed US household debt had the largest increase in 20 years in 4Q 2022. Interestingly, total delinquency levels of credit cards and auto loans remain below pre-Covid levels. 2.5% of outstanding debt was in some stage of delinquency as of December versus 4.7% at the end of 2019.

Source: Bank of America internal data

2. Results (w)rap…

A very succinct summary of the week seems to be companies are optimistic, and management have become very comfortable using ‘colourful’ language post lockdowns.

Source: FactSet, BofA US Equity & US Quant Strategy

Source: Sentieo

3. It’s inevitable till it isn’t…

The most anticipated recession ever is becoming less anticipated…

55% of European investors surveyed by Bank of America now expect a Euro recession over the next 12 months, down from 75% last month. And just 24% of global investors think we will get a global recession over the next 12 months, down from 51% last month.

Source: Bank of America

Source: Morgan Stanley

Disclaimer

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.

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