Weekly Market Update

Markets more or less flat as Fed continues as expected

July 28, 2023
Last week was uneventful and markets have been more or less flat for the last 10 days, with the exception of the UK, which rallied on the news that inflation was not as high as expected (though still higher than most places), plus some of the economic data has not been quite as dire as has been expected.

One curious and unexpected outcome of this AI experiment is that we must concede that it probably does a better job than us (as opposed to being just an expedient and quick but mediocre solution). We have experienced in real time what the population is probably mulling over in their sub-conscious – “what then, is the point of us (apart from actually managing portfolios)?”  Happily, we have come through the other side, and we’re ok with it (the ‘population’ should be relieved). At this point it is worth making a distinction between extractive AI (creating content based on known inputs) and generative AI (creative insight generated from the internet ‘collective’ along with the occasional hallucinatory experience). We are obviously using the former, which is a much more robust approach, which involves asking the AI to find some material (which we vet), adding some more material that we have come across during the week, and then asking it to write about it. Just how well it writes is a bitter pill to swallow for anyone that takes any pride in how they write, but this affront is softened by the fact that it purports to write in our style – the best of both worlds (and at least our feelings are spared!) One of the more tortuous, but sometimes rewarding, elements of this type of market writing is finding the common threads and relating it to portfolios or our current area of focus. It turns out the AI (in this case a quite well-designed front end to ChatGPT4) is very good at this too and it is a little spooky how it seems to find relevance beyond what we were aware of prompting it for. One traumatising aspect of the process has been the challenge to add something more thoughtful to the AI’s commentary – the end result being a burst of productivity on Monday morning followed by several days of thoughtful procrastination.

On the other hand, AI is by design much less capable of finding flaws in the consensus which it has so ably parsed, and that is probably where we should be spending more of our time. So, in summary (population take note), we think AI, as a market content generator, raises the bar and also forces us to make sure we are actually adding value and not painting by numbers.      

With all that in mind, we will be sending out an AI generated summary more promptly on Monday mornings, followed by a more thoughtful piece during the week, which will usually include a video.

As it happened, last week was uneventful and markets have been more or less flat for the last 10 days, with the exception of the UK, which rallied on the news that inflation was not as high as expected (though still higher than most places), plus some of the economic data has not been quite as dire as has been expected. You can find a pretty good AI generated summary of what happened last week here – the gist of it is that recent trends have continued but without too much drama, with economic data looking weak, although supply constrained housing markets around the world have held up, the consumer (particularly in the US) has been resilient, while inflation pressures appear to be receding, and wage inflation remains relatively constrained. Yesterday the US Federal Reserve raised rates one more time by 0.25%, very much as expected, and Jerome Powell managed to say nothing that would upset markets about their future intentions. On the face of it, this could look like the immaculate disinflation and soft landing that markets have been hoping for. Meanwhile in Australia these trends may look slightly worse, with retail faltering, especially given today’s unexpectedly weak retail sales number that has put the market on the back foot. The Australian inflation print earlier this week surprised on the downside, which was ostensibly a good thing that the market liked quite a lot, but perhaps also not unrelated to today’s weak sales. This may be a salutary reminder to be careful what we wish for and highlights the fact that this soft landing is an incredibly narrow path to stay on, and a lot can go awry betwixt and between.

US Tech and Emerging Markets Lead Recovery

August 2, 2024
Markets have calmed down a great deal in the last two weeks and more recently have mounted a bit of a recovery, with US tech and emerging markets leading the way.
Read More

Markets have mixed feelings about a slowing US economy

August 2, 2024
With many markets closed for a few days either side of the weekend and market liquidity very low, financial news has been mercifully subdued. There was mini-scare at the end of last week as a number of jobs-related reports came out which suggested that the overheating US economy might be slowing down.
Read More

Markets stay strong despite manufacturing weakness and recession fears

August 2, 2024
Markets have been remarkably well behaved since Easter, as most markets are up by 1-2% across the board with very little volatility.
Read More

Weak economic data, banking turmoil, and strong earnings results

August 2, 2024
After a relatively quiet few weeks the financial newswires have sprung back into life with positive US earnings surprises, another distressed US bank and an Australian inflation print that appears to have something for everyone.
Read More

Buffet Effect Boosts Japanese Market, US Consumer Remains Strong

August 2, 2024
April was a muddle through month where most markets ended where they started, some having moved about a bit more than others. The Nasdaq, and by extension the US market, continued to be the lightning rod for risk, but ended the month just in positive territory.
Read More

It's quiet out there...

August 2, 2024
As John Wayne said in The Lucky Texan (1934), “It’s quiet out there. Ain’t natural”. That seems to sum up what many traders and managers feel about markets at the moment, as the noisy post-COVID data environment continues to confuse.
Read More

A Week of Mixed Market Movements: Small Caps Rise as Tech Wavers

August 2, 2024
Read More

"What do I tell a client who wants to invest in Crypto?"

August 2, 2024
With 2021 bringing cryptocurrencies into the spotlight for both retail and institutional investors, is there a place for these currencies within client portfolio's?
Read More

The market has a "breadth" problem

August 2, 2024
Join InvestSense Director Jonathan Ramsay and Andrew Hunt of Hunt Economics as they discuss the markets ‘breadth’ problem and how strong liquidity should keep things afloat until February.
Read More

Finding value and maintaining confidence in a FOMO world

August 2, 2024
Join host Toby Potter of IMAP with Nick Kirrage of Schroders and Jonathan Ramsay of InvestSense as they discuss value as a style, and as a driver of conviction when investing.
Read More

Inflation in 2022 - Beware of cross currents in 2022

August 2, 2024
With inflation appearing to be on the way up again, what are some of the possible scenario’s for 2022? Where does inflation go from the zero bound we’ve reached?
Read More

What happened in markets in 2021, and why?

August 2, 2024
Join InvestSense Director, Jonathon Ramsey to reflect on the price action seen in markets in 2021 and what this might mean for 2022.
Read More

We've got a bad case of FOMO, but it's not what you think

August 2, 2024
With valuation still being the lightening rod for when markets react to external forces, the most expensive things tend to move the most. What does this mean for global asset allocators, and what is InvestSense’s position?
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