Quarterly newsletter, December 2022

Eight rate rises in a row

As a new year begins, we wish everyone a happy, healthy and prosperous 2023. Many families will be glad to put 2022 behind them and although challenges remain, we look forward to better times ahead.

The full issue, including the additional articles that accompanied it, is available as the original PDF.

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As 2022 drew to a close, investors remained focused on inflation, interest rates and recession worries. Inflation is running at around 7% to 11% in most advanced economies, including Australia. The Reserve Bank of Australia (RBA) lifted its target cash rate by another 25 basis points to 3.1% in December, the eighth monthly rise in a row, up from 0.1% in May. The RBA noted that “inflation is expected to take several years to return to target range (2-3%)”, and most economists expect at least one more rate increase.

High inflation and borrowing costs continued to weigh on consumers in December. The ANZ-Roy Morgan consumer price index was steady at 82.5 points in the run-up to Christmas, 26 points below the same period the year before. Slowing consumer demand and rising costs also dragged the NAB business confidence index into negative territory for the first time in 2022, down to -4.4 points in November. But it’s not all bad news. Australian company profits rose 18.6% in the year to September, the fastest pace in five years. Unemployment remains low, at 3.45% in November and annual wages growth was 3.1% in the September quarter, the fastest pace in a decade.

Returns for the half Financial Year (6 months)

  • All Ordinaries: 7221, up 474 points or +7.02%
  • Listed Property Accumulation Index 55477, up 2136 or 4.00%
  • 90 Day Bank Bills 3.26%, up 1.45%
  • AUD vs U.S. Dollar 67.47c, down 1.67c or down 2.42%
  • UK FTSE 100, 7451 points, up 281 points or 3.92%
  • Dow Jones Industrial Avg, 33147 points, up 2372 points or 7.71%

Guardian Investments Pty Ltd ABN 18 608 506 261 is a Corporate Authorised Representative of Guardian Associates Pty Ltd AFSL 238281. This page reproduces commentary published in December 2022 and is general advice only. It has not been tailored to your objectives, financial situation or needs, and the figures were current at the time of writing. Past performance is not a reliable guide to future returns. Seek personal financial advice before acting on it.