The ASX has been flat today. In late afternoon trading, the S&P/ASX200 was up just 1.60 points to 7,198.10.
Over the last five days, the index is virtually unchanged but is currently 4.88% below its 52-week high.
The top-performing stocks in this index are Syrah Resources Ltd (ASX:SYR) and Paladin Energy Ltd (ASX:PDN) up 4.02% and 3.93% respectively.
Looking at the sectors, the worst performed was Utilities down 1.24% at the time of writing and Real Estate down 0.65%. On the upside was Information Technology up 1.96%. Financials was the next best performer, gaining 0.50%.
On the small-cap front, the S&P/ASX Small Ordinaries was slightly higher, gaining 0.16%.
The market would have factored in today’s May retail sales data, which recorded an unexpected jump, which JP Morgan has called "temporary outperformance".
"It’s worth remembering that retail sales were very strong in November 2022 on the back of Black Friday discounts/sales, before reversing sharply in December," JPM senior economist Tom Kennedy said.
"Household balance sheets are now less robust given borrowing costs have increased and the saving rate has declined, so our base case is still for consumption to slow further in nominal terms over 2H23."
The ABS put the strength of the data down to discounting activity with “consumers taking advantage of larger than usual promotional activity and sales events”.
"Retail turnover was supported by a rise in spending on food and eating out, combined with a boost in spending on discretionary goods," ABS head of retail statistics Ben Dorber said.
“This latest rise reflected some resilience in spending with consumers taking advantage of larger than usual promotional activity and sales events for May.”
Essentially, we have seen end-of-year sales start earlier in 2023.
The ABS also highlighted food and cafes/restaurant sub-groups, calling out higher prices rather than volume.
"This was evident in yesterday’s monthly CPI indicator, which showed food price inflation, while moderating, is still tracking around 8% year-on-year," Kennedy said. "The read-through for GDP is real consumption will remain weak as high prices, low saving rate and expected deterioration in labour demand weigh on household spending."
While yesterday’s inflation figures saw the likelihood of a rate rise this month decrease, today’s figures could reverse that sentiment.
"Retail sales have stalled since Nov & r (and are) falling in real terms, but their relative resilience may embolden the RBA in terms of more rate hikes," AMP economist Shane Oliver tweeted.
Job vacancy data was also released today and has declined.
“While job vacancies have fallen by around 10% over the past year, they were still high – around 89% higher in May 2023 than in February 2020, just before the start of the COVID-19 pandemic," ABS head of labour statistics, Bjorn Jarvis says. “This May saw businesses continuing to report difficulties in recruiting and retaining staff."
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