The Australian stock market is currently experiencing a downturn, with the ASX 200 trading lower following disappointing GDP figures. The decline in investor sentiment has pushed the index away from its recent record highs.
Per capita GDP has fallen for seven consecutive quarters, marking the longest stretch of negative growth on record. The latest data shows a decline in per capita GDP growth of 0.3% quarter-on-quarter, leading to what is being called a 'per capita recession.'
The household saving-to-income ratio has increased to 3.2% as gross disposable income grew by 1.5%, outpacing a modest rise in nominal household spending. Essential spending, particularly in energy costs, has taken a hit, while discretionary spending has seen a slight increase, driven by clothing and footwear purchases.
Inventory levels have detracted from growth, while net trade and government spending have shown resilience. The Reserve Bank of Australia's restrictive monetary policy is influencing these economic outcomes, but the latest GDP figures raise doubts about the feasibility of the bank's forecasts. Market reactions suggest growing concerns about the sustainability of economic growth and the potential for further monetary easing.
Technical analysis of the ASX 200 indicates that it must break above the current resistance level to signal a more robust upward movement. The upcoming retail sales data for October will be crucial in determining the trajectory of the ASX 200 in the coming months, as it will shed light on the sustainability of consumer spending and business confidence.