September 2022 Newsletter
Welcome to our Spring newsletter. September means it’s football finals season and
hopefully the beginning of warmer weather despite the recent late winter chill.
In August, the focus was on US Federal Reserve chair Jerome Powell’s speech at the annual Jackson Hole business gathering on August 26, and he was blunt. To hose down talk of interest rate cuts in 2023, he said the Fed was focused on bringing US inflation down to 2% (from 8.5% now), even at the risk of recession. He said this will “take some time”, will likely require a “sustained period of below trend economic growth”, and households should expect “some pain” in the months ahead. The S&P500 share index promptly fell 3.4% and bond yields rose. Economists expect the US central bank will continue lifting rates each month for the remainder of 2022.
In Australia, economic conditions are less gloomy. Australia’s trade surplus was a record $136.4 billion in 2022-23. Unemployment fell to 3.4% in July while wages growth rose to an annual rate of 2.6% in the year to June, the strongest in 8 years but well below inflation. The ANZ-Roy Morgan consumer confidence index rose slightly in September to a still depressed 85.0 points while the NAB business confidence index jumped to +6.9 points in July, well above the long-term average of +5.4 points. Half-way through the June half-year reporting season, CommSec reports ASX200 company profits increased 56% in aggregate while dividends are 6% lower on a year earlier.
The Aussie dollar fell more than one cent over the month to close around US68.5c. Aussie shares bucked the global trend, finishing steady over the month.
If worrying about whether you can afford to retire is keeping you awake at night, recent research may help guide your planning.
When every dollar counts, it’s often tempting to drop life insurance but the benefits far outweigh the costs; it may even be tax-deductible.
Whether you haven’t had much of a break lately or if you’ve just got back from a trip and are planning your next one – there are a host of good reasons to take a holiday.
As always, if you would like to discuss the contents of this newsletter please give us a call 07 5559 5760.
Hugh Robertson