UGC’s Monthly Market Update – May 2023
Welcome to the UGC’s Monthly Market Update for May 2023.
Join UGC’s CEO & Chief Investment Officer, Joel Hewish, as he takes a deep dive into the latest financial market trends and conditions for the US and Australia, as well as providing an in-depth analysis of the stock markets.
Don’t miss out, CLICK HERE to get the latest video education from UGC.
KEY POINTS:
MARKET OVERVIEW – US
- Stock market breadth is a major issue and cause for caution.
- Mega-cap tech stocks reasonably valued despite their recent outperformance.
- What’s behind the rush into mega-cap tech stocks?
- Do Q1 earnings surprises suggest worst is behind us?
- Earnings outlook varies considerably from sector to sector.
MACROECONOMIC OVERVIEW – US
- Hard Landings are preceded by tight lending standards.
MACROECONOMIC OVERVIEW – AUS
- RBA raises interest rates by another 25bps
SUMMARY
- Stock market breadth is weak as mega-caps contribute to most of the index gains.
- Our investment portfolios are heavily tilted to mega cap growth stocks, including NVDA, which was one of our largest positions and surged almost 30% on Wednesday night.
- Recessionary risks remain high in the US.
- Our strategies such as Platinum Alpha and Global Alpha will likely struggle to outperform sustainably until breadth widens.
- We remain cautiously optimistic but continue to have one foot at the door to re-apply hedges if markets starts declining again.
- Rally in US growths stocks has been narrow.
- S&P 500 Cycle Composite for 2023.
- Volatility is starting to decline and moderate.
- Sentiment is starting to get to extremes.
- Previous years when S&P 500 Q1 returns were >7%.
