Quarterly newsletter, September 2023

Oil climbs, the labour market holds

Household wealth has increased for the third quarter in a row. It rose by 2.6% in the June quarter, pushed up by rising house prices and increases in superannuation balances. Meanwhile demand for credit was the lowest since 2005. Consumers have tightened their belts, they are not spending and consumer confidence is down. Retail sales growth for the quarter was the slowest since the pandemic lockdown.

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While the number of job vacancies have fallen by about 18% since their peak in May this year, they are still around 72 per cent higher than just before the pandemic — that’s an extra 160,000 positions that employers are looking to fill. Unemployment was unchanged at 3.7%.

The Australian dollar rebounded a little to finish the month where it began but it’s ended the quarter down about 2% thanks to surging oil prices and the highest U.S. interest rate settings since the GFC. Brent crude has continued its relentless climb since June, ending just over 30% higher than three months ago. That’s pushed petrol prices ever higher — about 17% over the same period — with the national average price for unleaded at $2.11 a litre compared to $1.80 in June.

High inflation looks set to become entrenched in major economies globally. Markets are looking for Central Banks to hike rates and Government restraint to engineer a soft landing for inflation and the economy.

Index performances for the first 3 months of the Financial Year were:

All Ordinaries: 7249 points, down 152 points or -2.05%;

ASX800 Property Accumulation Index 56758 points, down 1780 or -3.05%; 90 Day Bank Bills 4.14%, down 0.21%;

Returns for the quarter

  • AUD vs U.S. Dollar 64.28c, down 1.92 cents or down -2.98%
  • UK FTSE 100, 7608 points, up 76 points or +1.02%
  • Dow Jones Industrial Avg, 34407 points, up 900 points or +2.87%

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 September 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.