WES Western Midstream Partners, LP : Bullish and Bearish Analyst Opinions

The author is shorting Australian stocks due to macroeconomic headwinds including high inflation, low productivity, and fuel shortages.

The author identifies two dividend stocks, ARES and WES, as undervalued bargains.

Wesfarmers (parent of Bunnings/Kmart Australia) reported that "lower income households have less money to spend" and customers are becoming "more value conscious" due to persistent inflation and high interest rates. While the company is managing well, the macro commentary signals a tapped-out consumer in Australia. Retailers facing cost-of-living headwinds struggle to expand margins when volume growth depends on price cuts. AVOID WES (Wesfarmers) until inflation data stabilizes and consumer discretionary spending power returns. An unexpected rate cut by the RBA could reignite consumer spending.

Wesfarmers (Australian retail giant) warned that cost-of-living pressures are creating an uneven consumer environment, despite a slight earnings beat. Wesfarmers owns Bunnings and Kmart—the "canaries in the coal mine" for Australian consumption. If they are flagging consumer weakness, discretionary spending is hitting a wall. SHORT. The stock is already sinking on the news, signaling the market is pivoting from "earnings beats" to "forward guidance fears." Rate cuts by the RBA could reignite consumer spending.