Weekly Market Update

Markets Mixed as Australia Shows Resilience Amid Global Slowdown Signals

October 23, 2024

Markets were mixed over the last week with Europe and Japan down a few percent and the UK FTSE 100, S&P 500 and ASX 200 proving more resilient. The U.S. economy looks to be holding up well and the debate is shifting from a ‘soft landing’ to a potential no landing while Germany continues to suffer from the Chinese slowdown. 

Australia’s Job Market Powers On Despite Rate Pressures

Australia’s economy remains resilient, with the labour market adding 64,000 jobs (51,000 full-time) and the unemployment rate holding steady at 4.1% for six months. The participation rate rose to 67.2%, and the employment-to-population ratio hit a record 64.4%. NAB’s survey shows one in three firms still face labour shortages. Given strong employment and wage pressures, the RBA has maintained its tightening stance, delaying any immediate rate cuts and signalling that future easing will depend on inflation data. This was reflected in bond yields which pushed higher in Australia and the U.S.

 

China's Economy Slows, but Markets Rally on New Support Measures

China's latest economic data showed mixed results, with GDP growth slowing to its weakest in seven quarters. Despite this, the CSI 300 jumped 3.6% on Friday after new market support measures were announced, including a share buyback program and equity swap tools. While retail sales and industrial production in September saw slight improvements, concerns remain over the declining property sector. The People's Bank of China's gradual approach to stimulus has left markets anticipating more significant fiscal measures

Oil Prices Fall as China Slows and Risks Ease

Oil prices continued their descent, with Brent crude falling 1.9% on Friday to near $73 per barrel, marking a $6 decline over the week. The weakness reflects China's slowing oil import growth and reduced Middle East risk premiums as concerns about potential disruptions to the Iranian energy sectors eased.

 

Q3 2024 Earnings Season

We're still in the early stages of the Q3 2024 earnings season, with only 14% of S&P 500 companies having reported so far. While 79% have beaten Earnings Per Share (EPS) estimates and the overall growth rate of 3.4% marks the fifth consecutive quarter of growth, it’s the lowest since Q2 2023.

A concerning sign is that most of the growth is concentrated in the "Magnificent 7" tech companies—without them, the rest of the S&P 500 would show just 0.1% growth over the past year. Last week, ASML (a key supplier in the tech/AI sector) reported disappointing orders, which raises concerns about potential overbuilding in AI-related infrastructure. As the earnings season continues, markets will be watching for further signs of economic strength in the U.S.

Looking beyond this earnings season, analysts project much stronger earnings growth of 14% for Q4 2024 and 15.1% for 2025, suggesting a broad based earnings rebound is priced in and company outlook statements will be closely scrutinised.

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May: A Month of Gains Tempered by Volatility

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Fluctuating global markets and mixed economic signals in the last week of May

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Tech Gains and Conflicting Economic Signals Drive a Mixed Market

August 2, 2024
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Another good (inflation) and bad (politics) week for markets

August 2, 2024
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Markets Shrug Off Surprise Upside in US Inflation

August 2, 2024
Despite a higher-than-expected rise in US CPI for December 2022, markets remained relatively sanguine over the implications for growth and monetary policy.
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Markets Retreat on Fading Rate Cut Hopes Before Late Rally

August 2, 2024
Risk assets broadly declined last week as economic data showed resilience and central banks pushed back against aggressive market pricing for rate cuts, puncturing investor hopes.
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Global Equities Up on Hopes of Economic Stimulus

August 2, 2024
Last week saw a notable upswing in global equities, driven by optimism over a potential economic stimulus in China and dubious results in corporate earnings.
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U.S. Jobs Report Sparks Market Shift

August 2, 2024
Amid a mixed bag of US corporate earnings and a strong jobs report fueling rate hike expectations, global markets face contrasting fortunes, highlighting the complexity of forecasting economic trends in a time of technological growth and geopolitical uncertainty.
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S&P 500 Breaks 5,000 Amid Mixed Economic Signals and Rate Cut Speculations

August 2, 2024
It was an up and down week for markets after a strong finish the prior week.
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Unpacking a Volatile Week Amid Inflation Warnings and Surprising Strengths

August 2, 2024
Markets gyrated last week as hotter-than-expected US inflation data sparked an initial tech rout before recovering. Meanwhile better-than-feared earnings results and recession-resilient emerging markets outperformed.
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Andrew Hunt's visit to New York and some key implications for global markets

August 2, 2024
Last week Andrew visited the InvestSense offices and shared his observations and findings from his visit to the United States, specifically New York.
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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.
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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.
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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.
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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.
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‘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.
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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%.
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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...
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