More Consumer Spending

The latest JPMorgan Australasian Economic Weekly becomes further bearish on the NZ consumer spending outlook:

The trend in retail sales should continue to fall, extending the most prolonged
decline on record. Kiwi consumers remain reluctant to spend in the face of
heightened anxiety about job security. Rising unemployment probably is the biggest
headwind facing the Kiwi consumer and, with the business surveys pointing to more
firms shedding workers, the unemployment rate will continue to rise.

And the business sentiment outlook is looking even less peachy, despite the improvement:

The NZIER Quarterly Survey of Business Opinion (QSBO) showed a marked
improvement, with the headline reading climbing to -25 (from -65), meaning that
“only” a net 25% of firms surveyed last quarter expected the economy to deteriorate
in the next six months. Fewer businesses surveyed expect their own trading activity,
a leading indicator of GDP growth, to decline in the next three months—only a net
10% of firms expected a decrease in output and sales, down from 36% previously.

All key activity indicators in the 2Q survey were still in negative territory, however,
supporting our view that, though the rate of slippage will ease, the economy will
continue to contract in 2Q and 3Q. . . . . The resulting fall in labor income, combined with rising gasoline prices should dampen households’ purchasing power, increasing the headwinds faced
by consumers in 2H09.

It's hard to think that all the negative news out there and the current outlook is priced into the NZX50 as tracked by the ETF FONZ.