News & Insights
Here you’ll find our thinking and helpful insights on the latest developments in domestic and global markets.
Global Market Wrap - November 2022
November was a positive month for investors with the global equity index rallying strongly into the month's end.
Inflation remained a key talking point this month, with evidence that the economy is beginning to weaken due to numerous layoffs from large companies. Retailers are also starting to see a meaningful slowdown in spending. For investors, this means that the economic weakness that central banks are trying to engineer might finally be coming to fruition and rate hikes may soon slow down.
The announcement this month that tough COVID restrictions in China may be easing markedly improved sentiment in the region and buoyed the Chinese share market as a result.
Watch time: 4.01 mins
Investment and Economic Snapshot November 2022
The past couple of months have been much better than expected for equity and bond markets despite deteriorating demand conditions both domestically and globally. The ASX continued its golden run, posting +6.4% for the month and an impressive +3.0% for the year.
Global Market Wrap - October 2022
This October marked the best month for the Dow Jones since 1976. Global shares were also up 6% this month. Inflation, third quarter earnings and China's National Congress were the three key themes to hold investors' attention this month.
Most sectors were higher this month with energy and the industrials being the notable outperformers during October. While most regions also rose, notably Asia was the only region to fall. This was driven by the region around China with China, Hong Kong and Taiwan the notable underperformers – those countries most affected from China’s National Congress.
Watch time: 3.10 mins
Investment and Economic Snaphot October 2022
Most global financial assets rebounded this month following a sustained period of mediocre performance over August and September.
Global sovereign bonds posted a small gain in October following a gradual decline in real yields as the month progressed.
The Reserve Bank of Australia surprised markets with a less-than-expected 25bp rate hike. Australia was also the first among developed
market economies to slow its pace of hikes despite elevated inflation.
Global Market Wrap - September 2022
Global shares were down 10% in September - the worst month for global equities since March 2020.
All sectors and regions declined this month. However, it was healthcare and consumer staples that performed the best given they are more defensive sectors. Latin America was a notable outperformer, despite still declining.
Yet again, inflation was at the forefront of investors minds in September. Also grabbing headlines was the UK’s Mini-Budget.
October will see the commencement of the US third quarter earning season, which will provide a good sign of the health of the economy and companies, and whether we will start to see the impact of higher interest rates on company margins.
Watch time: 2.33 mins
Investment and Economic Snapshot September 2022
All major financial markets except for the US dollar went into rapid retreat last month. Global and US fixed-income markets posted poor returns as central banks continued to fight fire with fire with outsized interest rate hikes.
Meanwhile, global manufacturing activity continued to deteriorate adding to the weight of evidence that the global economy is struggling and running head-first into a recession.
Global Market Wrap - August 2022
August was a weaker month for global equities with markets falling around 3.6%.
Once again this month, investors were focused on inflation and interest rates. From his speech at the Jackson Hole Economic Symposium (the Fed Reserve’s annual gathering of central bankers), US Fed Reserve Chair Jerome Powell made it clear that inflation has not yet peaked. As a result, interest rates moved higher, and equity markets declined towards the end of the month.
Watch time: 3.40mins
Investment and Economic Snaphot August 2022
A brief rally kicked off the month as evidence of easing price pressures and deteriorating demand conditions led investors to speculate that the Federal Reserve will be forced to abandon its hawkish stance. However, all bets of a ‘Fed pivot’ were abruptly put to bed and the market was given a reality check following Federal Reserve Chair Powell’s speech at ‘Jackson Hole’ where he reiterated that the Fed remains doggedly determined to bring inflation under control, even at the price of the economy slowing significantly.
Global Market Wrap - July 2022
In terms of global equities, July was a strong month for investors. However, the focus remains on interest rates and potential recessions.
In the US, the news from earnings season was generally upbeat, however a number of consistent themes arose, including continued supply chain issues, higher interest rates and potential recessions. As a result, more companies announced hiring freezes and plans to downsize. Companies also reported changes in the spending patterns and behaviours of households and corporates. These are early indicators that interest rate hikes are impacting companies and their operations, resulting in the desired outcome of reducing demand.
Watch time: 3.50mins
Investment and Economic Snapshot July 2022
The month of July saw financial markets roar back to life following a terrible June and end of the financial year. However, the outlook for global growth continues to be challenged. Much depends on whether inflation can be brought to heel and if not, to what extent central bankers will go to bring it under control without breaking the economy in the process.
Investment and Economic Snapshot - FY2021/2022 in Review
FY2021/2022 was an extraordinary 12 months from both an economic and financial market perspective. While the six month period ending the calendar year 2021 showed positive signs, the second half of the financial year 2021/22 was arguably one of the worst periods we have experienced in many years for investors.
Investment and Economic Snapshot May 2022
The performance of global financial markets showed some improvement in May, with global equities, US equities, and emerging markets all generating small positive returns.
Global Market Wrap - April 2022
Global equities fell close to 9% in April and 13% YTD. The topic of inflation continues to dominate headlines, and while there was some indication that it had started to peak, the combination of the sustained war in Ukraine and China’s lockdowns are starting to create concerns that inflation might be "stickier" and run longer than expected.
This month, more “defensive” sectors performed well, with consumer staples and utilities among some of the best performing sectors.
Inflation and the risk of recession drove the markets in April, and that will continue to be the focus for investors going forward.
Watch time: 4:35mins
Investment and Economic Snapshot April 2022
Australia’s headline inflation rate surged from 3.5% to a 10-year high of 5.1%. In the face of overwhelming evidence that inflation is not only accelerating but wage growth is also finally picking up pace, the Reserve Bank belatedly increased the cash rate by 25 basis points to 35 basis points, the first increase in more than a decade.
Global Equities Update - March 2022
It has been a weaker start to 2022, with markets still down around 5% YTD. Astonishingly since Russia’s invasion of Ukraine, markets have risen around 4%.
It has now been two years since the original COVID market sell-off in March 2020. Markets are up 90% from the lows, and are also up around 30% versus the pre-COVID elevated market levels. Therefore, it’s been an exceptionally good period for markets.
Going forward, it’s all eyes on inflation and the path of central banks. In the coming weeks, reports from the US earning season will be released which will provide antidotes around how inflation and margin pressures are beginning to impact companies.
Investment and Economic Snapshot March 2022
As the war in Ukraine continues to unfold, the conflict is having a marked effect on the outlook for global economic growth, energy supply (especially in Europe), energy prices and of course, inflation. This has created an incredibly challenging environment for central banks to manage.
Global Equities Update – February 2022
In February, the Global Equities Market initially focused on the continuing theme of rising inflation and interest rates. However, at the end of the month this was overshadowed by Russia’s appalling invasion of Ukraine. For investors, this meant the Global Equity Index declined 2.5%. As was to be expected, the steepest decline was felt in Russia, as well as in surrounding countries.
Watch time: 4.55mins
Investment and Economic Snapshot February 2022
Russia’s deplorable invasion of the Ukraine in late February stole the headlines this month, fuelling a widespread pull back in global share markets. The fog of war contributed to an overriding sense of unease and uncertainty, exacerbating an already volatile macroeconomic backdrop still trying to come to grips with high inflation and the prospect that central banks will accelerate quantitative tightening.
Investment and Economic Snapshot January 2022
It was a poor start to the year for financial markets, with all major financial assets posting negative returns in January. Cash and commodities were the only asset classes to be spared as markets developed a nosebleed after reaching dizzy heights in 2021.
Global Equities Update – January 2022
January was a wild ride for investors prompted by a shift in expectations for future rate hikes. Early in the month, the US Fed Reserve confirmed rate rises much sooner and much higher than the market had originally anticipated. The expectation is now for 4-5 rate hikes in 2022, rather than the 1-2 rate hikes originally forecasted.
Looking ahead, there are still a number of challenges for markets - sustained, persisting inflation, central banks increasing interest rates, the broad liquidity environment moving lower, as well as some COVID distortions beginning to normalise. Considering all these factors, the outlook still remains optimistic for 2022.
Watch time: 4.20mins