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Weekly Brief Sheet - 08/05/23

Provides a market roundup, a selection of useful data points we use for our investment analysis, and some interesting articles/charts we have noticed recently.

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The S&P 500 Index ended the week lower despite a rally on Friday, as comments from Federal Reserve Chair Jerome Powell indicated that rate cuts might not happen as quickly as expected. Concerns about raising the U.S. debt ceiling added to the uneasiness, as Treasury Secretary Janet Yellen warned of potential default by June 1. Within the S&P 500, the information technology sector fared the best, while energy shares pulled back due to declining crude oil prices.

The Fed raised interest rates as expected, but Chair Powell hinted that this might be close to the peak level for this cycle, while keeping the possibility of further monetary tightening open. The labor market remains tight, with the number of job openings declining for the third consecutive month in March, while nonfarm payrolls showed the economy adding 253,000 new jobs in April.

Global markets experienced mixed results. The UK housing market stabilized as mortgage approvals increased, while Norway's central bank raised interest rates to curb inflation. Chinese equities were mixed following weak manufacturing data, with concerns that China's post-COVID recovery is losing momentum. However, a rebound in domestic tourism to pre-pandemic levels and increased spending during the recent holiday period raised optimism for a sustained recovery in China's services sector.

At home in Oz, the market is absorbing the prospect of further rate rises following a sudden end to the pause in the RBA's hiking cycle. With earnings season coming to a close Westpac is the latest major bank to post its half-yearly results, recording a $4 billion net profit — up 22% compared to this time last year. The bank is also increasing dividends to 70 cents per share, an increase of 15%. Westpac says the increase to its net profit was boosted by improving margins, thanks to rising interest rates and growth in home and business loans.


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Topical Charts:

Bond Vol vs SP500 Vol

 

DISCLAIMER: This report has been prepared by H&G Investment Management Ltd (ACN 125 580 305; AFSL 317155) to provide you with general information only. In preparing this report, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither H&G Investment Management Ltd nor its related parties, their employees or directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. You should obtain a copy of the Information Memorandum before making a decision about whether to invest in this product.

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