The information in these articles is current as at 1 October 2022.
Welcome to our Economic and Market Outlook – October 2022.
This edition covers the following topics:
International economy – “no other choice”
As Northern Hemisphere nights grow longer, central bankers face the unenviable choice of allowing prices to run rampant, or risk plunging economies into recession anyway by lifting interest rates too aggressively. What are governments doing to support households and businesses, and has inflation peaked?
How the Australian economy will avoid a recession
Despite the Australian economy recording its strongest growth in 10 years, it is veering towards a critical inflection point. Prices are soaring, and opinions are differing on where the official cash rate may peak. What does the RBA forecast and what will they do to avoid a recession?
Our recommendations on significant current challenges for Australian equities
Australian equities are facing a period of significant uncertainty and challenges. While valuations are not necessarily unattractive, we believe there is meaningful scope for consensus downgrades in the months ahead. Current valuations look “cheap” but in reality, this is more akin to a “calm before the storm” moment. Does this mean there downgrades still to come in our view?
Answers to the clouded outlook for international equities
On the positive side of the ledger, valuations are more favourable, particularly outside the US, with major markets trading at discounts of over 10% to their long-term average price-earnings multiple. Normally these circumstances are attractive moments to enter the market, however, there are several counterarguments that give us pause…