Gerry Harvey bets on Santa & air conditioners

It’s a funny business being a retailer. At least if the behaviour of Gerry Harvey is any guide. The titan of Australian retail said today:

“I think December, I’m hopeful, will beat last year…That might have a bit to do with the weather. If we have a really hot period across Australia and we sell a lot of air conditioners, then we’ll definitely beat last year. If it’s cold every day then we’ll battle because air conditioners are a big part of our business in December.”

In short, it’ll be a dud Christmas barring a heat wave. Nice strategy. And moreover, Harvey said:

“This year I’ve agreed that Santa can come back into the store…It is working well. Last weekend we had umpteen thousand of people into our stores and we had a good weekend because we’ve got the Santa and the kids can get their photograph taken.”

Whocouldanode?

Anyways, Mr Harvey has perhaps one hope, another rate cut next week. I’m leaning that way, as are markets, which give it a 60% chance:

I note, however, that markets have shortened odds on the cycle drawing to an end. The CS1Y sees only two more cuts:

And pretty quickly:

I still can’t get my head around it. Cuts may pause for a while but the second half of next year will require more easing, in my view. Just in time for Christmas next year. I wonder if Santa will be back?