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Research Insights | Market Commentary May 2024
In May US inflation for the year to April was released with the annual rate of inflation falling to 3.4% (down from 3.5% the previous month) which is still much higher than the US Federal Reserve’s targeted 2% inflation rate. Despite the higher inflation print bond yields, or to put it another way, the expected future cash rates fell assisting US equity valuations.
Australian Unity Pro-D Investment Funds – Monthly Fund Updates for April 2024
After a number of months’ gains, share and bond markets declined in April. Geopolitical risks took to centre-stage and inflation prints were above expectations in Australia and abroad, pushing back potential interest rate cuts.
Federal Budget Summary 2024-25
On Tuesday the 14th of May 2024, the treasurer Jim Chalmers handed down his third Labor budget
Research Insights | Market Commentary April 2024
In April equity markets reflected a change to valuations as the likelihood of cash rate cuts in 2024 lessened and investors began to factor in a “higher for longer” interest rate backdrop. Broadly speaking international and Australian equity markets were weaker by around 3% and Australian Real Estate Investment Trusts (AREITs) after rising by 10% in March sold off by 8% in April, reflecting the higher for longer bond rate thematic.
Australian Unity Pro-D Investment Funds – Monthly Fund Updates for March 2024
Investment markets performed strongly during March, with Australian and international shares each rising over 3% for the month and yield-sensitive sectors (including Australian REITs, up 9.6%) performing very strongly. US Fed Chairman Jerome Powell acknowledged strength in the US economy and labour market while also noting that recent inflation readings have been in line with expectations.
Research Insights | Market Commentary March 2024
In March equities moved higher and many markets continued making new all-time highs as bond yields fell slightly driven by the further expectation that central bank rate cuts are due to occur in 2024. However, the Bank of England, the European Central Bank and the US Federal Reserve are yet to cut rates after their recent tightening cycles.
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Your Most Valuable Asset and How to Protect It
If you were asked to list your most valuable assets, your home, vehicle and investment portfolio would probably top the list. But it’s easy to overlook the thing that allowed you to accrue all these in the first place: your ability to earn an income.
Property Now v 30 Years Ago
Australians trying to break into the property market today face their fair share of challenges. Property prices have risen at a much quicker pace than incomes, and the high cost of living can make saving a deposit seem next to impossible.
Australian Unity Pro-D Investment Funds – Monthly Fund Updates for February 2024
Share markets gained in February, led by US technology stocks as NVIDIA’s earnings demonstrated huge AI-driven revenue growth. Bond yields rose (prices fell slightly) during the month as consumer inflation remains high and investment markets push-back the anticipated timing of cash rate cuts.
Research Insights | Market Commentary February 2024
In February as per in January the US and Australian equity markets continued to move higher and achieve further new all-time highs. During the month US inflation fell to 3.1% annually from 3.4% driven by a decline in petrol prices. Offsetting lower petrol prices were higher housing and food costs. It’s worth noting that Core Inflation (which excludes volatile items such as food and energy) was flat at 3.9% annually. Australian inflation was reported late in February and came in at 3.4% annually, the same level as the prior month. The conclusion from these data prints is that whilst inflation is to a degree contained, there’s still a way to go before inflation is back between 2-3%. Longer dated bond yields rose in the month reflecting this dynamic.
Australian Unity Pro-D Investment Funds – Monthly Fund Updates for January 2024
Share markets extended recent months’ gains in January, following a strong US GDP print and further signs that US and Australian inflation is weakening. Bond yields rose marginally after sharp declines in recent months, muting fixed interest returns.
Research Insights | Market Commentary January 2024
In January the US and Australian equity markets achieved new all-time highs delivering returns for the 12 months to 31st January in their local currencies of 20% and 7% respectively. US equities were lifted by the strength of the “Magnificent 7” labelled stocks being Microsoft, Meta Platforms, Tesla, Apple, Alphabet, Amazon, and NVIDIA. The rally in equities was driven by cooling inflation coupled with the expectation that a hard landing, i.e. a recession, will be avoided and that cash rate reductions will start to occur soon. Therefore, risks to equity returns going forward have lessened. Bond yields didn’t move significantly in January noting that in December yields fell significantly reflecting the future potential cash rate reductions due in 2024 and 2025.
Australian Unity Pro-D Investment Funds – Monthly Fund Updates for December 2023
Share markets surged in December following an indication from the US Federal Reserve that it expects to cut interest rates three times in 2024, as US economic and inflation data releases show signs of slowing.
Research Insights | Market Commentary December 2023
In December bond yields continued their retreat (prices increased) which in-turn caused growth asset prices to also increase further. This rapid change in direction of bond yields over the last two months has helped to deliver a 5% return in passive fixed income investments for the year and has also seen strong gains from growth assets with Australian equities up ~12% and International equities (both currency hedged and unhedged) up over 20% in the last 12 months.
Australian Unity Pro-D Investment Funds – Monthly Fund Updates for November 2023
Investment markets achieved strong returns in November, breaking a run of negative monthly returns.
US inflation was near-zero for October, the US Federal Reserve hinted that its cash rate hiking cycle may have ended, and Australia’s October monthly inflation came in below expectations, leading some market participants to conclude that Australia may also have seen its last rate rise in the current cycle.
Research Insights | Market Commentary November 2023
November saw a large reduction in bond yields as the market took a better-than-expected US inflation print to conclude that the US Federal Reserve has beaten inflation, are done with further rate hikes and that a pivot (cash rate cuts) are on the cards for early 2024. The result of this change in belief saw a rally in growth assets, in particular bond proxies such as listed real estate and infrastructure, and the US Dollar weakened.
Financial Insights - November 2023
The Administrative Appeals Tribunal (AAT) can review decisions made under more than 400 Commonwealth Acts and legislative instruments. Independent of the person or department that originally made a decision, clients who appeal decisions via the AAT could see the decision affirmed, varied, set aside or remitted back to the department to make a new decision in accordance with instructions or recommendations put forward.
Australian Unity Pro-D Investment Funds – Monthly Fund Updates for October 2023
The Pro-D funds declined in value during October, with most underlying holdings falling in price during the month.
Investment markets, and the portfolios, were impacted by Hamas’ deadly attack on Israel, and the Israeli response in the Gaza Strip.
Research Insights | Market Commentary October 2023
October was marred by the start of the Israel-Gaza conflict with the devastating and continuing loss of lives for those in and around the conflict zone. This conflict currently shows no signs of abating and coupled with the ongoing Russia/Ukraine conflict, is impacting investors’ confidence with investors finding haven in assets such as the US Dollar and gold with the latter briefly rising above the key US$2,000/oz level.