Quarterly Investment Report – January 2024

Share this post

The Everything Rally

Contrary to expectations of an impending recession, 2023 was a favourable year for investors, with Global Equities and Bonds gaining +22% and +5%, respectively. 

Our report examines the key themes driving markets, risks and opportunities for 2024 and beyond. 

Summary of latest insights

  • Hopes of Rate Cuts – The market has shifted its focus to towards possible rate cuts amid signs of weaker inflation and a slowing but not stalling global economy (soft landing). This anticipation has fuelled the ‘everything’ rally in equities and bonds. 
  • Priced for Perfection – There is a risk that markets are priced for perfection, as lower bond yields can only sustain equity valuations if earnings growth remains steady.  
  • Avoiding Policy Errors – If economic growth outperforms expectations, there’s a risk of inflation returning and bond yields spiking, reminiscent of the errors made in the 1970s and 1980s. These concerns could lead to delayed rate cuts, potentially destabilising markets. 
  • Focus on Why – History suggests investors should focus more on the reasons behind central banks’ cutting rates rather than their timing, as future returns hinge on whether rates are cut because of a recession (hard landing) or cut to avoid one (soft landing).
  • Preparing before Predicting – While we do not anticipate a global recession, investors need to consider both growth and defensive assets within a portfolio context, adaptable to various economic conditions that may unfold.  We maintain a slight overweight to Fixed Interest, considering the near fifteen-year high bond yield. 
MPAB Logo

General Advice Warning: Any comments made in this communication do not consider your objectives, financial situation or needs. Before acting on any general advice, consider whether it is appropriate for you.

Read related market insights, updates and Quarterly Reports.

Super Tax Update: What You Need to Know

The first quarter of 2025 brought a notable shift in market conditions, driven by renewed geopolitical tension, shifting policy expectations, and deteriorating investor sentiment. In this environment, it’s easy to focus on what can go wrong. But extreme pessimism often signals a turning point.

Read more

Market Update – June 2022

Last Tuesday, the RBA lifted its cash rate by +0.50% to 0.85%, the biggest rate hike in 22 years and the first back-to-back rate hike since May 2010. It’s clear that ultra-accommodative policy settings (low rates) are no longer needed as consumer spending and record

Read more

MP Insights

Recent CBA card transaction data shows a significant lift in spending, mainly services, now 20% above pre-covid levels (restaurants, hotels, travel). The recent spending habits of consumers do not reflect a broader concern about inflation and future interest rate hikes. However, this is a medium-term

Read more

This website uses cookies to ensure you get the best experience on our website.