Weekly Market Update

Equity market declines, resilient bond markets, and the AI perspective

June 28, 2023
We had intended to retire the AI but following some quite positive feedback (which we don’t usually get) it gets a reprieve.

We had intended to retire the AI but following some quite positive feedback (which we don’t usually get) it gets a reprieve. We also get the sense that readers might be as interested in our exports in the land of AI as our pontifications about markets, which we wouldn’t take badly at all. Makes sense, as we all have to work out how to use this stuff and we don’t mind being your guinea pig if you don’t mind returning the favour. A few things stand out:

• The program that we have ended up using most for this purpose, which in turn uses the ChatGPT4 engine, really does write quite well. It’s also succinct (we’d elaborate but it turns out people don’t like waffle. Who knew.)

• The more you use these things the more the magic does start to look a bit more like plagiarism. It works best and is most reliable when you prioritise articles that it finds for you and also add some off your own (or others’) material. So, props to T. Rowe Price in the US for being what we think was the biggest influence on this week’s AI generated summary. We also fed it a podcast from Milford Asset Management (whose content was also quite obvious – we hope they don’t mind).  

• And that’s where it gets spooky again. Some comments were obviously, and sometimes rather clumsily, paraphrased (as one often sees in teenage homework when big words suspiciously take the place of simpler ones). But in other areas, it seems to draw some surprisingly logical and common-sense inferences that are not obvious in the text that has been focused on, implying that a more widely formed view is being brought to bear.

• Lastly, we think it does a good job of dynamically organising the data into structure that reflects the content and then focusing on the dominant themes. Last week, for instance, it organised the data by region as there were some markedly different regions effects but this week it identified that a more representative structure would show a dichotomy between the common voice emerging from central banks and the conflicting messages coming from the real economy (equally common across different regions).          

You can read the AI Summary here, but the overall narrative was that central banks continue to fight inflation and worry about obviously tight real time labour markets while leading indicators point to a slowing economy and looming recession. In that light it makes sense that most equity markets were on the back foot, while bond markets were surprisingly resilient to the prospect of higher rates – ten-year rates were down around the world while short-term rates rose slightly. Commodity markets also marched to the recessionary drumbeat with most of the energy and metal complexes down a few percent, although Iron Ore has recovered in the last few days. The biggest equity falls (around 4%) were from emerging markets, led by China. Japan also fell by 3% and Europe (including the UK) was down by 2% while US markets were only down 1% (with tech stocks and industrials trading in line for change). The week before last markets had been buoyed by the prospect of Chinese stimulus, but a lack of follow-up from the authorities has dampened share market expectations and possibly the prospects of its largest export focused trading partners which could add to the bite of domestic recessions in the West. Lastly, credit markets at last started to sniff out a recession, with yields easing last week but only by a few basis points for now.

Markets Steady Amid Geopolitical Tensions and Inflation Concerns

October 16, 2024
Read More

10-Year Series Part 2: QE Addiction and the Non-Bank Credit Boom

October 11, 2024
Read More

How Elections, Central Banks, and Geopolitical Tensions Moved Markets

October 11, 2024
Read More

10-Year Series Part 3: The Future Ain't What It Used To Be & Geopolitics

October 11, 2024
Read More

Strong U.S. Jobs Report and China's Disappointing Stimulus

October 11, 2024
Read More

Markets Brush Off Fed Rate Cut as the Outlook Remains Uncertain

September 30, 2024
Read More

Markets Steady Amid Geopolitical Tensions and Inflation Concerns

October 16, 2024
Read More

10-Year Series Part 2: QE Addiction and the Non-Bank Credit Boom

October 11, 2024
Read More

How Elections, Central Banks, and Geopolitical Tensions Moved Markets

October 11, 2024
Read More

10-Year Series Part 3: The Future Ain't What It Used To Be & Geopolitics

October 11, 2024
Read More

Strong U.S. Jobs Report and China's Disappointing Stimulus

October 11, 2024
Read More

Markets Brush Off Fed Rate Cut as the Outlook Remains Uncertain

September 30, 2024
Read More

Bad news equals good news

August 2, 2024
In recent years professional investors have got increasingly used to the fact that good news is bad news for markets because higher interest rates are likely to be necessary, and of course vice-versa. However, last week the effect was stronger than ever and stocks rallied mid-week amidst reports of widespread lay-offs and expectations of a weak US jobs report.
Read More

‘Buy the dip’ opportunism start surfacing

August 2, 2024
The US market finally market caught a bid last week. Early in the week the market was down few percent after an earnings miss by ad dependent social media platform Snap (of Snapchat fame) combined with weak guidance raised more doubts about the economy and economic resilience of tech companies.
Read More

US momentarily dips into official bear market territory

August 2, 2024
The seventh negative week in a row for the US sent it briefly into official bear market territory before it recovered slightly late on Friday. The world’s largest stocks (Apple, Microsoft Amazon and Google) are all down 25%.
Read More

Helping your clients assess the climate impact of their Portfolio

August 2, 2024
Nathan Fradley explains how the ethosesg technology can help you assess and design an ethical portfolio that aligns to an investor’s personal values.
Read More

It's going to be a long six months

August 2, 2024
Join Jonathan Ramsay and Andrew Hunt as they discuss what the future holds for the Chinese growth model, Where to from here, and what will the implications be for the west…
Read More

What is a fair way to compare funds?

August 2, 2024
How Can We Do Apple With Apples Comparisons For Industry Funds With Different Asset Allocations And Levels Of Illiquid Investment?
Read More

Helping your clients assess the climate impact of their Portfolio

August 2, 2024
Nathan Fradley explains how the ethosesg technology can help you assess and design an ethical portfolio that aligns to an investor’s personal values.
Read More

Carbon credits and investing – is it the outcome we expect?

August 2, 2024
ETFs that invest in carbon credits are now available. Why should we assume that their price will go up over time? And does buying a carbon credit ETF actually contribute positively to emissions reduction? Will it actually generate the outcome investors are expecting? This article explores the issues around investing in carbon credits.
Read More

Better World makes a difference with investment in renewables

August 2, 2024
There are many direct assets and funds that contribute positively to climate action within the InvestSense Better World Portfolios. Meridian Energy is one of the stand-out direct assets in the portfolio with a climate energy focus.
Read More

Bad news equals good news

August 2, 2024
In recent years professional investors have got increasingly used to the fact that good news is bad news for markets because higher interest rates are likely to be necessary, and of course vice-versa. However, last week the effect was stronger than ever and stocks rallied mid-week amidst reports of widespread lay-offs and expectations of a weak US jobs report.
Read More

‘Buy the dip’ opportunism start surfacing

August 2, 2024
The US market finally market caught a bid last week. Early in the week the market was down few percent after an earnings miss by ad dependent social media platform Snap (of Snapchat fame) combined with weak guidance raised more doubts about the economy and economic resilience of tech companies.
Read More

US momentarily dips into official bear market territory

August 2, 2024
The seventh negative week in a row for the US sent it briefly into official bear market territory before it recovered slightly late on Friday. The world’s largest stocks (Apple, Microsoft Amazon and Google) are all down 25%.
Read More

How Mark Lewin saved 13 hours a week with Managed Accounts

August 2, 2024
Mark Lewin was a financial planner, but is now the Director of Back Office Heros. In his planning business he gained significant efficiencies by recommending and implementing managed accounts for his clients. He tells us how...
Read More
Icon of a letter

InvestSense insights, delivered straight to your inbox.

Icon of a letter

Get the latest industry news

Icon of a letter

Get the latest industry news

Icon of a letter

Get the latest industry news