UGC Monthly Market Update | August 2023
Welcome to the UGC’s Monthly Market Update for August 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
- Earnings Forecasts Versus Share Price Change – Magnificent 7
- Relative Performance of Equal Weighted Index Versus Market Cap Weighted Index
- Small Caps Usually Generate Higher Returns
- Fund Manager Expectations for US Recession in next 12 Months
- Historical Performance of S&P 500 After Fed’s Last Rate Hike
- US 2nd Quarter Earnings Season Results
MACROECONOMIC OVERVIEW – Global
- Global Growth Expectations Are Muted Through 2024
MACROECONOMIC OVERVIEW – US
- Key drivers of US inflation over the past two years appear to have now rolled over.
- Signs of cooling Shelter and Services is a telling sign that the U.S. Federal Reserve rate hikes are having the desired effect.
MACROECONOMIC OVERVIEW – AUSTRALIA
- Australian consumers remain depressed, but business conditions remain okay.
- Australian Construction sector leads significant rise in corporate insolvencies this year.
SUMMARY
- Market in seasonally weakest period of the year and correction is underway. Markets typically bottom in early to mid-October.
- Index performance is still very narrow with Mega Caps dominating. Large, Mid and Small Caps still lagging.
- Core inflation is now finally starting to cool meaning the Fed is likely very near the end of its hiking cycle.
- Australian Consumer Confidence is at recessionary levels but has not yet infected the business sector.
- Business operating conditions getting harder with insolvencies increasing both in Australia and US.
- We remain cautiously optimistic that a new bull market has begun but are wary of market conditions on a three-to-six-month view. We continue to maintain one foot at the exits and ready to reapply hedges.
