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28 Mar 2024 - Hedge Clippings | 28 March 2024

By: FundMonitors.com

    

Hedge Clippings | 28 March 2024

Taylor Swift saved the day for February retail sales - or possibly just diverted the consumers' spending away from their normal patterns. Without the one-off impact of 600,000 "Swifties" (including Albo, who took time off from the affairs of State to attend at least one of the seven concerts) the month's retail sales at 0.1% would have only just made it into the positive. Add in the combined effect of concert tickets, clothing, merchandising, accessories, and dining out, and the number nudged up to 0.3%. While some of that would have diverted spending from other outlets and spending, much of the hard earned cash of the Swifties would have left with Taylor herself partly as ticket sales, and partly royalties on clothing and merchandise.

Hedge Clippings - unlike Albo - didn't get swept up in the hysteria, although we have to admit that many years ago there was a phenomenon known as Beatle Mania which did get our attention. Having not heard much of it we can't comment on Taylor's music, but amazingly still remember the words of most Lennon & McCartney numbers from many years ago.

Meanwhile, household wealth data, also released today continued to rise strongly in the December quarter, up 2.8% on the back of strong residential property (+1.2%) and share prices, locally and overseas which added another 1.3% to the total. Monthly CPI came in at 3.4% in the year to February, which is the third flat month in a row, a fact that won't be lost on the RBA when they next meet in May, missing the April meeting under the new schedule. The RBA has been fence sitting for a while (since last November in fact when they increased rates the last time) and they won't be happy until the inflation number shows real progress. That progress may be delayed by recent and upcoming wage increases, plus Stage lll tax cuts due to flow from July.

During the week we had a glimpse into the thinking behind the outcome of November's US election result courtesy of an invitation to Kings Gate Capital's Expert Investor Panel. The logic went thus: Both candidates are clear contenders for their party nomination - although with an outlier that Trump still has some legal and financial hurdles to overcome, and Biden still has to ensure he doesn't stumble and mumble (or worse) too badly before then.

Assuming each overcomes their respective issues, there are two factors which may/will affect the outcome: Firslty ad spend, which Reuters expects to increase by one third over the previous campaign in 2020. Biden is outspending Trump by a significant multiple, and assuming the advertising works - otherwise why would they do it - that will have some effect.

Secondly, and possibly more importantly with voting not being compulsory, will be the voter turn-out numbers - not necessarily the total, but the numbers from each side of the electorate. While Trump has his Republican MAGA followers, who will always support him, there are a group of died-in-the-wool Republicans who, while they'll never vote Democrat, can't bring themselves to vote for Trump.

Equally, Trump's combination of personality and legal issues will encourage normally non-voting Democrats to turn out to vote on the day, even if they're not convinced by Biden's candidature to do so.

Of course that makes Trump the dominant player on the day - just as he'd like it. Unless the outcome is the same as in 2020!


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