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.
THE market is still waiting for a clear indication of how much the global economy will slow this year.
Last week’s economic data didn’t provide a strong signal one way or the other.
European data continued to be better than many feared. US data told the story of moderating inflation and slowing consumer activity as higher rates began to bite.
US reporting season has been mixed from an earnings perspective.
About 100 S&P 500 companies report this week – including Apple, Amazon, Meta, Alphabet, McDonalds, Caterpillar, Merck and Exxon Mobil – which could provide a clearer picture.
Job cuts, which started in tech, have now spread to a broader cross-section of sectors.
The US Federal Reserve meets this week and is expected to hike 25bps, perhaps with some jawboning around “we are not done yet” to keep the bulls at bay.
The S&P 500 gained 2.48% last week. The NASDAQ was up 4.32% and the S&P/ASX 300 rose 0.56%.
The Bank of Canada became the first G10 nation to pause its hiking cycle after a 25bp increase to 4.5%.
The Canadians cited “growing evidence that restrictive monetary policy is slowing activity – especially household spending”.
Though they also noted economic growth was “stronger than expected and the economy remains in excess demand”.
This bolstered a growing view that the risk of central banks dogmatically driving the economy into deep recession may have fallen. Instead, a growing chorus of voices suggest the US can achieve a soft landing – in stark contrast to consensus views just a couple of months ago.
Find out about
Crispin Murray’s Pendal Focus Australian Share Fund
In addition to Fed hawk Christopher Waller’s recent “case for cautious optimism”, prominent economist Larry Summers has said economic figures are looking better than he expected three months ago.
Summers had previously been bearish on the Fed’s ability to avoid a hard landing.
International Monetary Fund managing director Kristalina Georgieva also noted the global economic situation was “less bad than we feared a couple of months ago”.
Elsewhere, there was a slew of data released last week, none of which was individually significant or market moving.
December’s Core Personal Consumption Expenditures (PCE) index (a measure of inflation that excludes more volatile categories such as food and energy) increased by4.4% annually.
This is down from November’s annual rate of 4.7%.
On a monthly basis it was up 0.3%, in line with consensus. It is now at its lowest level since October 2021.
The deflator rose at 3.1% (annualised) in Q4, slowing from 4.5% in Q3 and 5.4% in Q2. Most of the downshift is in the goods component, with rents expected to begin slowing.
Data shows consumers pulled back in December, with spending falling by 0.2% from the month before. Personal income rose 0.2% last month, the smallest increase since April.
Personal saving rate as a percentage of disposable income increased to 3.4% from 2.9% in November.
The savings rate is now up one percentage point from its September low. This is all possible evidence of belts tightening.
Headline US GDP growth of 2.9% looks positive, but strength was driven by inventories.
Domestic demand was relatively modest and likely further weakens in the March quarter.
December new home sales rose 2.3% to 616K, marginally below the consensus of 617K. It’s likely a lack of existing homes for sale is pushing people to buy new homes.
Initial jobless claims are extremely low at 186k, well below the four-week average of 198k.
Employment agencies continue to indicate that wage pressures are subsiding.
Australia bucked the trend of moderating inflation, with the December quarter’s CPI print coming in hotter than expected.
Inflation rose 7.8% year-on-year, its highest rate since 1990 and ahead of 7.6% expected. It was up 1.9% over the quarter versus 1.8% expected.
Pendal Horizon Fund
A concentrated Aussie equities portfolio aligned with the transition to a sustainable, future economy
The RBA’s preferred measure – the trimmed mean CPI – lifted 1.7% in the quarter to 6.9% year-on-year, versus consensus expectations of +1.5% and +6.5% respectively.
This is well above the central bank’s 2-3% target and ahead of its 6.5% end-of-2022 forecast.
A 25bp hike in February is now baked in.
Consensus still expects rates to peak at about 3.75% somewhere in the middle of the year.
Digging into the numbers, 87% of categories in the inflation basket are now exceeding 2.5% annualised growth.
Services inflation is now at the highest level since 2008, at 5.5% annualised. This was driven by travel-related categories including domestic airfares and accommodation (+19.8%).
Rents continued to rise in the quarter with the annual pace of increase now at 4%.
Given the current rental crisis across Australia it is hard to see any abatement in this area soon. Food and grocery inflation remains high and broad-based.
One bright spot is that the rate of growth in business input costs, including labour, have been falling across all industries since the mid 2022 peaks
The outlook for economic activity in the European Union continues to look less dire.
The Euro area composite flash PMI – a measure of economic activity – increased 0.9pts to 50.2.
The gain was broad-based across sectors as the services sector surpassed 50 for the first time since July 22. New orders, employment and backlogs all showed improvement.
About 30% of S&P 500 companies have so far reported actual results for the December quarter.
Of these, 69% have reported actual EPS above estimates. This is an improvement on 67% at the end of last week. But the five-year and ten-year averages are 77% and 73% respectively.
At an index level, aggregate Q4 earnings are 5% lower than the previous quarter. If this figure holds, it will be the first time the S&P 500 has seen a decline in annual earnings since Q3 2020, when earnings fell 5.7%.
Four of the GICS 11 sectors are reporting year-over-year earnings growth, led by the energy and industrials sectors.
On the other hand, seven sectors are reporting a year-over-year decline in earnings, led by materials, consumer discretionary, communication services and financials.
Financials have been the biggest contributor to the decline in earnings estimates since December 31.
Drawing on more than 25 years of experience investing in top-performing Australian companies and a background in accounting, Jim manages our Long/Short Fund and co-manages our Imputation Fund. He is a Chartered Accountant with membership of the Australian Institute of Chartered Accountants.
Pendal Focus Australian Share Fund is managed by Crispin Murray. The fund has beaten its benchmark in 14 years of its 18-year history (after fees), across a range of market conditions. Find out more about Pendal Focus Australian Share Fund here.
Pendal is an independent, global investment management business focused on delivering superior investment returns for our clients through active management.
This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current at January 30, 2023.
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