Market Update – Quarter ending 30 September 2022

Global financial markets experienced a rebound off their June lows in July and August, with performance spurred by improved earnings data, employment growth, and enhanced retail sales numbers across Europe, the United States, and Australasia. US technology giants like Google and Microsoft released their second quarter corporate earnings which proved to be more resilient than many analysts had expected. The New Zealand share market also did well with the S&P/NZX 50 up 2.2% on the back of improved investor confidence after the full border re-opening. The Australian market also continued the upward trend, returning 0.4% (in AUD). 

However, the risk of recession still loomed as the US economy saw a -0.9% decline in GDP growth over the second quarter and the US Federal Reserve (Fed) increased interest rates by another 0.75%. After building narrative that the Fed may be forced to ‘pivot’ to a more accommodative monetary policy, global share markets saw a substantial sell-off in August after Fed Chair Jerome Powell seemingly quashed the pivot narrative and reiterated their commitment to raising interest rates and getting inflation under control. This expectation of rising interest rates has continued to stoke recessionary fears in the market. Global Equities ultimately ended the September quarter down -4.4% (in local currencies).