Market & Portfolio Update - April 2023
Global share markets had another positive month in April, rising 1.6% in local currency terms, as investors were encouraged by the latest round of company financial results. Of the companies that have reported to date, the majority have exceeded earnings expectations, with particular strength seen in large tech names such as Alphabet and Meta.
Following the collapse of two small regional US banks in March, we saw a third US regional bank (First Republic) come under pressure toward the end of April. Ultimately the US regulators took control of First Republic Bank and sold it to the much larger and well-capitalised J.P Morgan.
New Zealand’s annual inflation rate fell from 7.2% to 6.7% in the first quarter of the year. While still well above the Reserve Bank of New Zealand (RBNZ) target rate of 1 – 3%, it was lower than many economists were expecting.
Undeterred by the better-than-expected inflation rate, the RBNZ raised the OCR an additional 0.5%, taking New Zealand’s benchmark interest rate to 5.25%. Current market expectations are for one more hike to 5.5%.
The Art of Weathering Market Turbulence
As seasoned investors know, share prices can move up and down a lot. It’s what investment professionals refer to as ‘volatility’. Sometimes price volatility may be relatively low, but over the last 3-4 weeks volatility has spiked and global shares, especially those in the US, have fallen rather sharply.