US inflation

Good enough, I suppose, on the inflation front, with CPI core at 0.4% mom, and YoY trending lower.

That budget deficit (-8%) has to working in the other direction, however. Means Fed has to hold at restrictive levels for longer than perhaps otherwise anticipated.

Most measures are moderating, whether we look at supercore (excluding anything remotely volatile) core (some volatile items) and headline (includes volatile items).

A key one is shelter (imputed rents), which takes a while to flow through the data (market based measures of US rents peaked over a year ago, and have been declining since). Those lags means we can expect ongoing deflationary contributions from owners equivalent rents in the CPI data over the next couple quarters worth of inflation data.

That’s good!

Goldilocks continues.

Treasury yields declined a touch, good for the bond portfolio, stocks in general slightly weak, but tech (duration) sensitive names (e.g. the Nasdaq) held up well.

Again, whilst I often lament some of our own exposures to secular growth, I am occasionally pleased when they work better than I expected (that’s the whole point of diversification). The NDQ is up quite a bit, and having even a modest amount has been, on net, beneficial.

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.

Receive our investment insights

Something went wrong. Please check your entries and try again.