Wealth Management Market Update

Matthew Firman

5 April 2023

The Moore Australia Wealth Management team recently gathered for our quarterly investment committee meeting. Given that we are all still grappling with the current market cycle, we thought it prudent to provide feedback from the meeting.

There is no doubt the investment landscape has been a challenging one for some time now, and numerous commentators have described it as a market that has both given and taken away in the same breath. These current market conditions are directly related to the ongoing uncertainty that is still highly prevalent in markets. The rhetoric of “will we or wont we" (in relation to recession) both domestically and globally is seeming to play a significant part in the uncertainty factor.

The market information and data have been changing rapidly and the short-term economic commentators seem to change their opinions daily. As is always the case, we have a few negative stories in the market that have commentators questioning whether the markets are suffering from short term issues or if these are indicators of long-term fundamental problems. These include the latest developments with Silicon Valley, Signature and First Republic Banks in the US and Credit Suisse in Europe.

Although the above banking issues create global headlines, the bottom line is that while markets are uncertain and jittery there will continue to be overreactions to any issue deemed to be negative or that may increase chances of a recession. The positive news is not being received as equal in the current environment, but some good news is the European Central Bank is suggesting that their data over the last six months is indicating a decline in headline inflation in the major economies of the UK, US, and Europe.

When we investigate our own backyard, Australia is not removed from the global economics, however, there is some improvement to the outlook for Australian equity on the back of China removing its ‘zero covid’ policy. The result of an intense interest rate hiking cycle now provides a much better floor for interest rate bearing investments, which we have not seen for some time. Our banking system was strengthened post Global Financial Crisis (GFC) by an uplift in the capital requirements required to be held by our banks. We also have the government guarantee on deposits in place up to $250,000 per institution.

Much of the Wealth Management's committee discussion suggests that volatility will continue to impact markets in the short term, however, our firm is consistently looking beyond the ‘noise’, given we take long term views on markets. As we continue to monitor the market, we will review it in line with our overall goal of achieving long term positive client outcomes through market cycles. Although the length of a market cycle is often an unknown quantity there is a consensus view that we are closer to the end of this cycle.

Please contact us should you have any questions.

Navigating Current Market Conditions: Insights from Moore Australia's Wealth Management Team

Wealth Management Market Update

5 April 2023

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