Quarterly Investment Report – July 2023

Averted or Delayed?

Despite challenges from inflation, rising interest rates, and a global banking crisis, equity markets have shown remarkable resilience. 

Our July report and video examine the key themes, risks and opportunities for the remainder of 2023 and beyond. 

Summary of our latest insights

• Building momentum – If economic growth, here and abroad, remains resilient to inflation and higher interest rates, then the equity market rally could continue over the next quarter.  

• Inflation looks to be on a downward trajectory – Inflation is moderating in Australia, the U.S., Europe, and many other markets due to lower energy prices, fewer supply chain disruptions and the impact of previous interest rate hikes. 

• Concerns the market is prematurely pricing in a recovery  – It’s unclear if the long-awaited recession has been averted or merely delayed. Persistent consumer spending and a strong labour market increase the likelihood of sustained higher interest rates, a clear headwind for growth.    
• China is on the cusp of deflation – Historically, deflation within the world’s second-largest economy happen only during a global recession (2001, 2008-09 & 2020). 

• Remaining patient  – We maintain a balanced view, with a slight overweight to defensive assets, positioned for the potential upside whilst preparing for opportunities from the known unknowns. 

^{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.}