Financial conditions will likely remain tight for the remainder of 2023

In May, investment markets were unsettled by the continuing brinkmanship over the US debt ceiling, talks of a US recession and lingering inflation.  As we wrote in last month’s update, we had no doubt that the ceiling would be raised, as it eventually was, however the cost would come in the form of higher interest rates on government debt.  The Australian markets returned -2.5% driven by the banks and resource companies.  NAB decreased 11.03% over the month whilst Fortescue Metals was -8.26% lower.  The primary risk facing Australian banks remains a shrinking net interest margin (NIM) due to intense competition in the mortgage and deposit market, concerns about commercial property, and disruptive FinTech solutions like Apple’s new merchant acceptance system.  Global shares increased 1.2%.  The increase was narrow, driven predominately by global technology giants including Alphabet, Microsoft and Amazon.  Nvidia – a dominant supplier of artificial intelligence hardware and software, receive ‘incredible orders’ for its chips and software used in data centres to power the compulsing-intensive requirements of generative AI.  The increasing popularity of applications, such as Chat-GPT and Bard, has led to the remarkable growth in orders.  (Please click the below link to read the full article).

Read More

Comments are closed.