March 2024: Nvidia and a resilient reporting season

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

Australian companies also posted their half year results during the quarter. Overall, earnings were stronger than expected and profit margins were resilient as companies passed costs onto consumers. Low unemployment and growing wages ultimately facilitating the digestion of higher prices.

A prominent theme for the quarter has been the rise of Artificial Intelligence. At the heart of the boom is Nvidia – the multinational software designer, GPU producer, and now, the 3 rd largest company in the world – whose share price jumped more than 87% in the quarter. Investors and businesses have become enthralled by the potential use cases for the technology.

Recent data out of the United States showed that Core US Inflation rose 0.4% in the previous month (or 3.5% for the 12 months ended March) – gas prices, mortgages and rent being the biggest contributors. This is supportive of the “higher-for-longer” rhetoric – which we support – and challenges the idea that inflation will fall quickly. Australian traders are now pricing out the prospect of an RBA rate cut this year.

Concurrently, the geopolitical backdrop appears bleak. The conflict between Israel and Palestine is persisting, the Russia and Ukraine war has exceeded the 2 year mark, and Japan’s potential inclusion in AUKUS (to become JAUKUS) has set the scene for further conflict with China.

Similarly to last quarter, we remain cautious and expect volatility to remain present in local and global equity markets. Higher interest rates continue to present strong opportunities for us in the fixed income space – we will continue to make appropriate allocations here. We will seek to use additional cash positions to take advantage of potential pullbacks in the broader market.

Returns for the financial year to date

All Ordinaries: 8,153.70, up 752 points or 10.16%
Listed Property Accumulation Index: 73,836.60, up 14,949 points or 25.39%
90 Day Bank Bills: 4.34%, down 0.11%
AUD vs US Dollar: 65.17c, down 1.41c or 2.12%
UK FTSE 100, 7,952.60 points, up 421 points or 5.59%
Dow Jones Industrial Avg: 39,807.37 points, up 5,438 or 15.82%

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 2024 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.