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 the ASX 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.

THE sharp equity market rally last week was fuelled by very bearish positioning and ignited by weak job opening and manufacturing data. There were also hopes that emerging financial strain would prompt a Fed pivot.

But the “good is bad” phase proved short-lived. Solid US employment data emphasised a tight labour market, while OPEC+ quota cuts sent the price of oil higher.

The S&P 500 ended the week up 1.56% and sitting at a key technical support level of 3500-3600.

There is scope for the bear market bounce to continue back to the next technical level of 3900-4000, but data trends are not supportive.

The US economy remains resilient with insufficient signs of weakness. Meanwhile inflation remains stubbornly high – with the additional risk that fuel prices are rising again.

The S&P/ASX 300 was up 4.5% last week and continues to outperform. It’s down 6% for 2022, while the S&P 500 has lost 22.7%.

This is due to currency moves, the index sector mix and a defiant RBA.

Our central bank raised rates only 25bps. It’s crossing fingers and toes that the rest of the world fixes the inflation problem and it won’t have to induce a recession here.

Sustainable and 
Responsible Investments 

Fund Manager of the Year

Economics and policy

US job openings were a lot weaker than expected, which is good for markets. The ratio of openings to unemployed remains very high, but the quarterly downward trend is encouraging.

There was also a fall in job “quits” which is a signal people see less opportunity to move.

Job layoffs remain low, which is also constructive. The best scenario is one where the job market loosens via less hiring (ie less labour demand) but layoffs remain limited (ie more supply). A big increase in layoffs is more likely to trigger a recession. 

The US is now 50% of the way to reducing the gap between jobs and workers to a level where wages should slow sufficiently, according to a Goldman Sachs indicator.

Wage growth appears to be running over 5% annualised on most measures and needs to drop below 4%.

However the relief on this data was short-lived. Payroll and employment data reinforced the tight labour market.

This is the Fed’s key policy problem, since they risk recession in bringing this down.

There is much focus on the lessons of the 1970s, where the Fed heeded political pressure and loosened too soon. This meant it had to go through three phases of tightening to finally solve the problem.

US payroll data was in line with expectations (+263k jobs). The household survey was a bit stronger than consensus, with the unemployment rate falling to 3.5% due to a 0.1% drop in the participation rate. 

The market did not like this because:

  1. Other data points had been weaker – and the market was hoping for more of that
  2. A tight labour market supports wage growth, reinforcing the Fed’s need to tighten rates further and potentially risk recession
  3. The participation rate looked to be increasing, but it fell this month as hopes of greater labour supply faded. The gap in participation compared to pre-Covid levels is mainly in older people and this is unlikely to return

Payrolls need to get down to 50-75k per month to be at a level where wages may slow to the target level.

The household survey of wage growth among production and non-supervisory workers is seen as a better proxy of underlying wage growth. It was stable month-on-month, landing at 5.8% year-on-year. This is consistent with inflation running between 4 and  4.5%.

Pendal Focus Australian Share Fund

Now rated at the highest level by Lonsec, Morningstar and Zenith

Mixed signs on the state of the economy are another challenge for markets.

The bears can point to measures such as housing and trucking as signs the economy is slowing sharply. But consumers continue to hold up – as do hiring intentions.

One of the signals from the employment report is that nominal incomes continue to grow – and in fact are picking up in real terms as inflation slows. This makes the Fed’s job harder.

Underlying resilience in the US economy is also evident in a pick-up in the Atlanta Fed GDP Now tracker. It’s re-accelerated in the last couple of weeks, driven by net exports and the consumer.

The Cleveland Fed inflation tracker is another real-time indicator not helping the case for a pivot. It continues to indicate inflation running at 0.4-0.5% month-on-month.

We will see the CPI print released on Wednesday. This will be a key determinate of market direction.


OPEC+ surprised the market with a bigger-than-expected quota cut of 2 million barrels per day.

It is worth bearing in mind that many members are already producing below their quotas. By a rough estimate the real production impact would be about half of that announced. The market is expect 0.8 to 1.2m barrels to be taken out of the market.

There will be another meeting in early December to review the impact, so this will be in place for at least two more months.

This was not designed as a direct attack on the US, despite the latter’s reaction.

Instead, OPEC is concerned about the impact of recession on demand – and also that the oil price appears to have disconnected from fundamentals.

When you compare the oil price to inventory levels there is probably a US$20 gap.

OPEC also believes the inability to reach production quotas shows a lot of countries are not investing in capacity –  which will make the oil supply-and-demand balance more precarious in the future.

This requires higher prices to incentivise investment. In response to rhetoric from the US, OPEC is also pointing to factors such as levies, carbon taxes and fuel standards as reasons why petrol prices are so high in the west. These, they say, are in the hands of western governments to resolve – if they want to.

Adviser Sam is invested
in making our world

A better place.

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

There is now upside risk to the oil price because:

1. Chinese refinery production is ramping up (counter to OPEC’s concern over recession)

2. Another round of sanctions on Russian oil will start in the next few months, creating more friction in oil markets

3. SPR releases will slow from 1m barrels per day to about 500k through to the year’s end.

In combination, these could have an impact of 1.5m to 2m barrels a day on oil supply-and-demand balance, more than offsetting any slowdown.


The Reserve Bank got global attention last week as people thought the lower-than-expected 25bp hike might signal the beginning of a small pivot from central banks.

We find it hard to draw any broader global conclusions from the RBA’s move.

It could be slowing rate rises to gather more information and gauge the effect of tightening to avoid a policy mistake and recession. The likely rationale includes the notions that:

1. Australian wages have not risen as quickly as other nations, so the RBA has less to do at the moment in loosening the labour market

2. Australia has more short-rate sensitivity due to floating-rate mortgages

3. The RBA has more meetings than the Fed, so they will get the opportunity to re-appraise in early November with more data.

4. They are probably anticipating a reasonably tight federal budget, ie no fiscal stimulus, unlike the UK

5. They will be expecting the tightening in the ROW to help contain inflationary pressures

Also, the RBA has already tightened more than other regions in Europe and Canada, though not as much as the US.

There is some risk to the RBA stance.

While wages growth is slower than the US, surveys indicate it is still rising, unlike the US.

Should this continue – and the Australian dollar weakens – we could see inflationary pressures build, forcing the RBA to go harder again.

For now the ASX can take comfort from the more benign approach from the RBA, with strength across all sectors and resources and domestic cyclicals running. Consumer staples was the laggard.


The trifecta of higher bond yields, oil prices and the USD is a challenge for equities. 

Friday’s sell-off leaves the US market in a finely balanced position in the near term.

The bounce earlier in the week had all the hallmarks of the start of at least a bear market rally, with some extremes in terms of buying / selling ratios.

On average, these rallies are 15% over 32 days, so the 6% in 4 days looked like it should have had legs.

Wednesday’s CPI print is likely to have a large bearing on whether the S&P 500 gets back to 3900 in the near term. 

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 October 10, 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