UGC Monthly Market Update | December 2023

Welcome to the UGC’s Monthly Market Update for December 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.

MARKET OVERVIEW – US

  • S&P 500 Performance vs Post WWII Average (%).
  • Breadth Amongst Big-Tech Is Improving.
  • Small Caps vs Large Caps.
  • Breadth Amongst Small Caps Is Improving.
  • Equities Performance relative to interest rate cuts.

MARKET OVERVIEW – US & AUS

  • Positive Seasonal Patterns in Australia & US Equities Ahead.

MACROECONOMIC OVERVIEW – US

  • Annual US Inflation Rate continues to Decline.
  • Historical Performance of S&P 500 After Fed’s Last Rate Hike.
  • Timing of recession starting after 3m/5yr yield inversion.
  • Inverted Yield Spread Longest Stretch In History.
  • One Of The Longest Streaks Of Unemployment Below 4%.

MACROECONOMIC OVERVIEW – GLOBAL

  • Global Growth Expectations For 2024 Dampening Commodities Market.

MACROECONOMIC OVERVIEW – AUS

  • Strongest Population Growth Since 1956.
  • Australia’s Unemployment and Underutilisation.
  • Household Sector Consumption and Sentiment.
  • Annualised Australian Inflation Rate as at end of September 2023.

SUMMARY

  1. 2023 was a year of slow recovery from the 2022 bear market. Recovery has been uneven with Mega Caps leading the way until recently. Conditions improved significantly in past 6 weeks.
  2. Major indexes are significantly overbought in short term. Persistent overbought conditions are a positive for stocks long term, but indexes at risk of a pull back or digestive phase in short term.
  3. Small caps have finally started to participate but still a lot of work to do to recover from bear market.
  4. Central Banks globally are pivoting to interest rate cuts next year. Still uncertainty around when they will start cutting and in what magnitude they will cut.
  5. Australia is experiencing the biggest uptick in population growth since 1956, which has been supportive for GDP overall and helping reduce strains in the labour market, business/consumer confidence is weak.
  6. Market conditions the best we’ve seen since November 2021. Recessions in the US or Australia can’t be ruled out but, any correction in short term will likely see us get very aggressive in our portfolio postures.

UGC General Advice Past Performance Warning

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