The China data shows a bounce from heart-attack-inducing to a comparative just-a-little-bit-of-not-expanding-hence-below-50.
Commodities are enjoying the data, although they’ve been signalling their belief in stimulus for some time now (and that such stimulus will work).
We believe that over the long run, this approach cannot work (i.e. supply-side measures aimed at bolstering fixed asset investment) and that all it will accomplish is an increase in debt.
As such, we remain broadly content with our underweight to commodities, painful though it might be at the moment, within our direct equity portfolios.
However, at the overall multi-asset portfolio level, our various capital deployments, ~4% of equities purchased since March, as the various regions sold off (e.g. European equities at the outset of the war, Emerging market equities after the China tech/property crackdown, and so on) will put us in quite good stead as markets rally, with that market rally (and bolstered sentiment) a function of data exactly like that shown above.
Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.
This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.
Please note that past performance is not a reliable indicator of future performance.
General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.
Taxation warning: Any taxation considerations are general and based on present taxation laws and may be subject to change. Aequitas is not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and investors should seek tax advice from a registered tax agent or a registered tax (financial) adviser if they intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.