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

  1. Market in seasonally weakest period of the year and correction is underway. Markets typically bottom in early to mid-October.
  2. Index performance is still very narrow with Mega Caps dominating. Large, Mid and Small Caps still lagging.
  3. Core inflation is now finally starting to cool meaning the Fed is likely very near the end of its hiking cycle.
  4. Australian Consumer Confidence is at recessionary levels but has not yet infected the business sector.
  5. Business operating conditions getting harder with insolvencies increasing both in Australia and US.
  6. 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.


UGC General Advice Past Performance Warning

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