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1. Job hunt…

As we reopen in NSW, looks like there is lots of jobs going in retail/hospitality, and no one to fill them!

2. Housing speed limit…

APRA recently adjusted their home loan serviceability assessments to use an interest rate buffer of 3% p.a., up from 2.5% p.a. previously, which is likely to reduce borrowing capacity for certain home loan applications. This comes as 65% of new home loans funded have a debt-to-income ratio (DTI) > 4x (and 22% > 6x). the average home loan size has also passed 7x the median household income.

3. Short on supply…

Supply-chain issues were once again in focus this week, with President Biden even holding a press conference to address the matter and initiatives they are taking to try and ease the bottlenecks. We have rounded up some news items from the week showing how widespread supply issues are:

  • Cotton prices surged to a 10-year high as extreme weather (droughts and heat waves) has wiped out cotton crops across the US, who are the biggest exporter of the commodity in the world. So far higher costs are being passed along to consumers as manufacturers and retailers have pricing power, including Levi Strauss.
  • Cotton futures could pressure margins for smaller Australian retailers, like Kmart. Although judging by the lines outside their stores on Freedom Day (see picture below) customers may also be willing to pay up.
  • The ASOS CEO left with immediate effect as the company warned supply chain pressures and consumers returning to pre-pandemic behaviour could reduce 2022 profit by >40%
  • Coffee farmers in Colombia, the world’s #2 arabica producer, have failed to deliver up to 1m bags of beans this year or nearly 10% of the country’s crop, leaving exporters, traders and roasters facing steep losses. World coffee prices have soared 55% this year, mainly due to adverse weather in top producer Brazil.
  • Apple is expected to slash iPhone production by 10M phones due to the global chips shortage
  • Lebanon suffered a 24-hour blackout over the weekend as the country’s 2 main power stations were shut down due to fuel shortages.


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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