FIG AVENUE INVESTMENTS

Australian economy

Economic growth has started to soften in Australia, with the most recent GDP growth data coming in under expectations. This has not slowed activity down too much, with jobs added in February at very healthy levels of over 60,000 persons¹. 

International economy

US GDP growth is now at below trend levels, with the most recent quarter's final figure being revised down below 1% year-on-year. And whilst inflation for the year has dropped back to 5%, there is a growing discomfort regarding the overall health of the US economy. The same can be said for most other regions around the world, with the likes of China, Europe, Japan and the UK all recording no or little economic growth at the moment¹. 

Investment Markets

Australian shares were one of the worst performers in March, finishing slightly down for the month (despite a 4% rally in the second half of the month). Even with a relatively major market scare in the regional banking sector, US stocks managed to push toward a 3% gain for March with investors hoping for an impending pause in the current rate hiking cycle². 

Outlook

Most market participants have tilted their interest rate expectations in light of slowing economies and the recent collapse of some big players in the finance world. These 'collapses', however, need to be put into context, with a bank's survival often dictated by reserve requirements and not actual insolvency. Markets will likely continue to volatile as uncertainty about the level of central bank dovishness remains.

S&P/ASX200 - 12 months to 31 March 2023