The InvestSense Podcast

Last week saw a notable upswing in global equities, driven by optimism over a potential economic stimulus in China and a series of strong corporate earnings, particularly in the technology sector.

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.

Despite a higher-than-expected rise in US CPI for December 2022, markets remained relatively sanguine over the implications for growth and monetary policy.

After powering markets in 2023, big technology companies have seen a sharp selloff in early 2024, challenging the notion of their invincibility. This pullback has raised questions about whether liquidity trends and the Fed's market interactions have been a key driver of recent optimism, rather than just falling inflation and economic strength.

Barring any mishaps between Christmas and New Year, after a turbulent 2022, global equities will end the year up around 20%, driven by a staggering rebound among technology and other growth stocks, epitomised by the so-called "Magnificent 7" mega-cap tech giants.

The last week in markets, as is often the case, was totally dominated by the US economy and monetary policy. In this case it was an encouraging inflation print on Wednesday, followed by the US Fed’s decision to keep rates on hold the next day.

It was a mixed week in global financial markets as the market continued to assess the likelihood of a hard or soft landing next year and the implication for inflation and interest

Global markets showed mild positive trends, with the S&P/ASX 300 gaining 0.7%, despite a slight decline in international markets. Speculative sectors like small and mid-caps led domestic gains, while sectors like healthcare and information technology stood out globally. The month of November saw a significant rally in growth stocks, while fixed-income markets remained stable, and the debate continues between economic optimism and technical factors driving market trends.

It has seemed all week that, in quiet US holiday trading, the only thing moving markets was the ‘will they/won’t they’ speculation about the future role of OpenAI’s CEO Sam Altman

Stocks continued their strong November rally this week, as hopes grew that inflation has peaked and the Fed is nearing the end of its rate hiking cycle. The S&P 500 rose 1.9% on Tuesday following the cooler than expected US CPI print, bringing its gains for the month so far to 7%.