1. Wine not…
Exports of goods and services from Australia grew 4.4% m/m to ~$58 billion in May 2023. Total exports to China, the country’s largest trade partner, rose by 9%. But we are seeing demand for Aussie wine falling. Australia’s 3 largest wine export markets (US, UK, HK) have seen a slowdown in commercial wine consumption. And wine consumption YTD in some EU markets is down double digits, including Germany, France and Spain.
Meanwhile in the US we are seeing a wine bifurcation. The bottom chart below shows demand for cheaper wines (<$15) is shrinking, but demand for more expensive drops (>$15) is rising.
Source: SipSource
Source: SipSource
2. Tough times…
Some of us are dealing with rising mortgage costs and cost-of-living pressures. And apparently some of us are buying Lamborghinis!
Luxury vehicle sales have hit new highs in Australia, as the ANZ consumer confidence level ticked down to its lowest level since the 1990’s recession.
Source: Evans
ANZ Consumer Confidence
Source: Jarden
3. Ending on a high…
Temperatures may be low, and the Swans may have botched their finals chances, but we are entering the best seasonal period for equities! July tends to be a good month on the Nasdaq, with 15 consecutive years of green in July (including 2008). And the start of July has been the best 2-week trading period of the year since 1928 on the S&P. Closer to home, July is the best month of the year on the ASX too. Only 1 in the past 11 July’s has been negative. And we saw US equity ETFs attract the most inflows in June since October 2022.
And have Sydney’s rental prices peaked? The latest data from SQM is suggesting as much. For the week ending 4 July, Sydney rents were down 2.3%, and were down slightly m/m.
Source: Credit Suisse
Source: Bloomberg
Source: UBS