Hi there! Welcome to the new look Pendal website... Take a two minute tour to see what we’ve changed.

Mainstream Online Web Portal

Investors can view their accounts online via a secure web portal. After registering, you can access your account balances, periodical statements, tax statements, transaction histories and distribution statements / details.
Advisers will also have access to view their clients’ accounts online via the secure web portal.

Crispin Murray: What’s driving Aussie equities this week

Here are the main factors driving the ASX this week according to our head of equities Crispin Murray. Reported by portfolio specialist Chris Adams.

CHAIR Jerome Powell’s hawkish tone after the Fed’s 75bp rate hike weighed on markets last week.

Though signs that Beijing may getting ready to roll back zero-Covid by March prompted a Friday rebound, helping contain the damage.

In Australia the RBA reinforced its more dovish rate path, choosing to take a risk on inflation to avoid triggering a damaging recession.

The S&P 500 fell 3.3% last week and is trading in the middle of the 3500-3900 range.

There was substantial rotation as growth and technology stocks suffered on the rate outlook. But cyclicals — and particularly metals and energy — did well on the signals from China.

Other global equity markets fared better, given a more cyclical skew.

The S&P/ASX 300 rose 1.6%. It is down 4.2% for 2022, versus -19.8% for the S&P 500 and -32.6% for the NASDAQ.

The medium-term outlook still depends on the degree of economic downturn and its impact on earnings.

There is some debate about the degree of leverage earnings will have to the downturn.

Historically, recessions have led to an average 20 per cent fall in earnings. Though this is often in a low-inflation environment, when nominal GDP (a proxy for corporate revenue) is low.

Sustainable and 
Responsible Investments 

Fund Manager of the Year

In this instance the bulls argue that three factors may mitigate earnings decline:

  1. Companies will benefit from higher nominal growth, supporting revenue and helping cover fixed costs
  2. Materials and energy companies will see continued strong earnings, given lack of supply
  3. The potential re-opening of China may offset weakness in Europe and the US
The Fed

The Fed’s initial press release indicated a coming deceleration in the pace of rate hikes and an extension of the hiking cycle.

But Powell ensured this was not interpreted as the longed-for dovish pivot. The peak in rates would likely be higher than previous forecasts, he noted in a press conference.

This is expected to be released in December’s quarterly “dot plot” — likely 5% to 5.25% by the end of 2023.

This is 50bps higher than the September indication and 25bps more than consensus forecasts.

Two-year US government note yields rose 24bps and 10-year bond yields were up 14bps for the week in response.

Higher rates and a further hawkishness put a nail in the “pivot” trade and saw growth stocks underperform.

US economic data

October’s payroll data showed 261,000 new jobs, versus 193,000 expected.

This strong print was somewhat mitigated by a weaker household survey, which showed a decline in employment of 328,000 and an increase in unemployment from 3.5% to 3.7%.

Less helpfully, the participation rate for the “prime” age cohort fell from 82.7% to 82.5%.

Average hourly earnings were stronger than expected at 0.4% month-on-month versus consensus of 0.3%.

However this series has been softening. The three-month moving average is now down to 3.9% annualised, well below the annual rate of 4.7%.

All wage data series are rolling over, but growth is still too high at around 5%. It needs to fall to 4%. 

Earlier in the week we saw job-opening data reverse the previous month’s decline. 

A range of indicators show the labour market softening and lay-offs picking up. But the data is still too strong for the Fed to feel comfortable on inflation.

Finally, manufacturing data (the ISM index) weakened more than expected, though not enough to indicate a recession.


The week’s most significant surprise came from China with rumours of a shift in thinking on zero-Covid.

We saw:

  1. Rumours of a “re-opening committee” meeting
  2. People’s Daily articles dispelling concerns on long Covid
  3. German chancellor Olaf Scholz — on a visit with President Xi — speaking of an agreement to supply the Pfizer / BioNTech vaccine to foreign nationals living in China
  4. Rumours that Li Qiang, the next PM, supported mRNA vaccines which could be rolled out in the next 2-4 months
  5. A Chinese epidemiologist say Chinese mRNA vaccines are as effective as Western versions and express confidence in inhalable vaccines

Some of these stories were walked back at the weekend — especially after a surge in Covid cases, particularly in Guangzhou.

We are careful not to extrapolate too much from this. There is a view that it would make more sense for Beijing to roll back zero-Covid once the northern hemisphere winter has passed.

But the market reaction highlights how far consensus positioning was caught out by a shift in sentiment on China.

Chinese stocks moved about 18 per cent on the week. Resources stocks and the Australian dollar also moved sharply on Friday. There were moves in resources with oil and copper up.

This highlights the issue that Chinese re-opening could renew inflationary pressure.

Finally, Beijing also sent a message to Russia cautioning against the threat of nuclear weapons.

This was seen as an important attempt to reduce geopolitical tensions.


As expected, the RBA raised rates 25bp to 2.85% last week.

The message remains far more benign than the Fed. This is seeing a divergence in outlooks for domestic and internally-focused stocks within the ASX.

The RBA expects rates to peak at 3.5%, versus 5% to 5.25% in the US. Inflation is expected to peak at 8% this quarter and fall to 4.7% a year later, with GDP slowing to 1.4% in 2023.

The risk is inflation does not drop so quickly, given this level of growth.


The combination of a hawkish Fed and hope on Chinese re-opening led to a major rotation in the market last week.

There was a 9% relative move in the S&P 500 mining sector and 8% in the S&P 500 energy sector versus the NASDAQ.

Adviser Sam is invested
in making our world

A better place.

Watch as Sam meets a
mum rebuilding her life
thanks to responsible

US earnings season deteriorated to below long-term averages in term of beats and above in terms of misses.

Most telling was the poor performance of the technology mega caps, where there was a second wave down. As always, it seems “the generals are the last ones to be shot” in a bear market.

Apple unwound all the previous week’s performance.

Atlassian fell 28% post result and is now down 73% from its peak 12 months ago. Twilio fell 34% on its result, taking the decline from its Feb peak to 93%.

Both these companies are leveraged to the tech sector as service providers, so their slowdowns are compounded.

The rotation is also reflected in earnings.

Exxon quarterly earnings have now caught up to Microsoft. Though the energy sector’s proportion of the S&P 500 is back only to 2019 levels — still well below its highs of a decade ago. The Australian market’s sector mix and skew to resources/energy and financials continued to provide resilience.


About Crispin Murray and Pendal Focus Australian Share Fund

Crispin Murray is Pendal’s Head of Equities. He has more than 27 years of investment experience and leads one of the largest equities teams in Australia. Crispin’s Pendal Focus Australian Share Fund has beaten the benchmark in 12 years of its 16-year history (after fees), across a range of market conditions.

Pendal is an independent, global investment management business focused on delivering superior investment returns for our clients through active management. 

Find out more about Pendal Focus Australian Share Fund  

Contact a Pendal key account manager

This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current at November 7, 2022. PFSL is the responsible entity and issuer of units in the Pendal Focus Australian Share Fund (Fund) ARSN: 113 232 812. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient’s personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance. Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections. For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com

Keep updated
Sign up to receive the latest news and views