March 2023: The banking system steadies

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Share markets in Australia and overseas have rallied to end the month in a better position as the global banking system steadies itself and there are expectations of a tempering in rate rises. The ASX200 finished the month at about the same point it started after suffering a slump mid-month. In Australia, the gains have come largely from the mining sector and the strength of US markets.

Employment remains the economy’s good news story with the jobless rate still at a low 3.5% in February and job vacancies almost double what they were three years ago before the start of the pandemic. Inflation is slowly coming down from its peak of 8.4% in December 22. The consumer price index (CPI) recorded a fall to 7.4% in January then 6.8% in February. The most significant contributors to rising prices remain housing, food and non-alcoholic beverages and fuel prices.

Falling residential property prices have caused a drop in household wealth, which decreased for the third consecutive quarter. Household wealth is now $14.4 trillion, as at the December quarter 2022, that’s 3% lower than a year ago. The delayed and full effect of interest rate rises should continue to impact household wealth for some months to come.

Returns for the 9 months of this financial year 2023

All Ordinaries: 7373, up 626 points or +9.28%
Listed Property Accumulation Index 55767, up 2426 or 4.55%
90 Day Bank Bills 3.71%, up 1.90%
AUD vs U.S. Dollar 66.89c, down 2.25 cents or down 3.25%
UK FTSE 100, 7631 points, up 461 points or 6.42%
Dow Jones Industrial Avg, 33273 points, up 2498 points or 8.17% Morningstar Moderate Index returned 4.19%

Morningstar Balanced Index returned 5.75% and

Morningstar Growth Index returned 7.69%

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 March 2023 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.