8/17/2023 0 Comments Tsb medium fisher![]() Conversely, sectors with exposure to economic cycles underperformed because of slower economic activity. The information technology sector globally outperformed other sectors, benefiting from the opportunities presented by AI. China's economic performance fell short of expectations due to COVID-19 waves affecting activity and a soft residential housing market undermined consumer confidence. Economic indicators continued to signal potential downside risks to economic growth forecasts. The increase in government bond yields, driven by US Budget negotiations and uncertainty surrounding central bank interest rate moves, also influenced valuation multiples. Global share markets experienced a decline as weakening economic data impacted earnings expectations. This was due to high demand for graphics processing units (GPUs) for use in generative AI technology such as ChatGPT (see ‘What to watch’ for more on AI). Shares in chip-maker NVIDIA surged over 30% in May after revenue forecasts came in over 50% higher than analyst estimates. The technology sector was buoyed by artificial intelligence (AI)-frenzy during the month.There continued to be large dispersion within the index, with the information technology sector advancing 8.0% whilst the energy sector dropped -9.6%. The MSCI All Country World Index (ACWI) returned 2.0% in New Zealand dollar terms, and -0.2% in New Zealand dollar-hedged terms. ![]() The New Zealand bond market was similarly weak, the Bloomberg NZ Bond Composite 0+ Yr Index declined -0.5%. It was a weak month for Australasian markets, with the S&P/NZX 50 Gross index (with imputation credits) declining -1.7% and the S&P/ASX 200 Index declining -2.5% in AUD terms (and -1.6% in NZD terms).Investments with robust fundamentals and manageable debt levels are preferred in this environment. While some central banks may pause from raising rates, the overall balance of risks tilts towards tighter financial conditions. The conflict between observed inflation and soft lead indicators for economic activity continues to influence interest rates and economic forecasts.borehead - Moderator on Not So Fast, Orsted.The Media Balance Newsletter: 19/6/23 - Australian Climate Sceptics blog on Is the Great Fishkill of 1976 About to be Repeated? By Jim Lovgren. ![]()
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