With the September quarter firmly behind us, investors now find themselves ‘Stuck in the Middle’ of a plethora of important market themes and at the crossroads of a similarly broad array of economic trends.
Artificial intelligence, otherwise known as AI (or even SI) has reshaped the global paradigm. From a world recovering from the mayhem of a global pandemic, the first of the modern era, to one staring down a technological revolution, investors have had to contend with a significant degree of change; change that is happening at a historically accelerated pace.
This has inspired a wall of capital, an amount measured in hundreds-of-billions of dollars, to be invested in data centre build-outs, in turn driving up commodity prices alongside memory chips, storage, CPUs and most notably GPUs (the domain of the world’s largest company Nvidia).
The higher demand for capital this has generated, has also helped drive elevated interest rates with many benchmark yields reaching levels not seen in more than a decade. Of course, inflation continues to remain problematically high (something we’ve been warning of for over three years now), albeit certainly not helped by ascendant oil prices, creating challenges for central banks as they try to tame prices without tipping over economies.
Combine this with a US administration that shows no compunction in attacking friends and foes alike, the smouldering Iran war, Russia’s ‘Special Operation’ in Ukraine, and an increasingly assertive North Korea, and the market environment might not be as calm below the surface, as it appears from above.
In this report, we delve into what we see as the key areas of focus for the coming months and the considerations investors should be contemplating in the hope of capturing the best possible set of outcomes from them. Our Special Article this time around, considers what our country might need to address should it wish to maintain its image as the “Lucky Country’.
Whilst the challenges ahead are real, we are excited for the opportunities that will undoubtably be created, and stand ready to act in managing the risk of the portfolios for which we’re responsible.