Financial Market Wrap March 2024

Jun 17, 2024

February: Global Shares Dominate

  • February saw solid returns, particularly for Global Shares.

  • Global Shares on an unhedged gained 5.9%. Global shares on a hedged basis gained 4.7%. Momentum as a factor was exceptionally strong again in February, extending its lead over the next strongest factors Growth and Quality.

  • Australian shares continued to advance slowly, with the broad market index, the S&P/ASX 200 Accumulation Index gaining 0.8% for the month. The best performing styles for the month were Momentum and Growth. The poorest performing style was Value.

  • Similar to global small caps, Australian small caps are trading at an attractive discount to larger cap stocks, which may be starting to entice investors.

  • Fixed income lost ground this month after returning very small gains last month. Australian Fixed Interest lost 0.3%, while global fixed interest lost 0.8%.

  • The Australian dollar lost 1.5% against the U.S. dollar over the month.

U.S. Inflation Edges Up

Globally

  • The annual inflation rate in the U.S. unexpectedly edged up to 3.2% in February 2024, compared to 3.1% in January and above forecasts of 3.1%. Energy costs dropped much less than expected (-1.9% vs -4.6% in January), with gasoline declining 3.9% (vs -6.4%), utility gas service falling 8.8% (vs -17.8%) and fuel oil going down 5.4% (vs -14.2%).

  • U.S. core inflation eased to 3.8% from 3.9%, compared to forecasts of 3.7%. The monthly rate remained steady at 0.4%, instead of forecasts of 0.3%.

  • In the U.S., the number of job openings went down by 26,000 from the previous month to 8,863 million in January 2024, the lowest in three months and below the market consensus of 8.9 million.

Locally

  • The monthly Consumer Price Index (CPI) indicator in Australia stood at 3.4% in the year to January 2024, unchanged from the previous month and less than market forecasts of 3.6%.

  • Retail sales in Australia increased by 1.1% month-on-month in January 2024, unrevised from the preliminary figures. The latest result followed a 2.1% fall in the prior month, with all retail industries contributing to the upturn after consumers brought forward spending to take advantage of discounts during the Black Friday event.

  • The next RBA interest rate decision is on the 19th March, where it is widely anticipated that the RBA Official Cash Rate will remain unchanged at 4.35%.

Major asset class performance

Source: FactSet, Lonsec & Insignia Financial, 29 February 2024

Indices used: Australian Shares: S&P/ASX 200 Accumulation Index, Australian small companies: S&P/ASX Small Ordinaries Accumulation Index, Global shares (hedged): MSCI World ex Australia Net Total Return (in AUD), Global shares (unhedged): MSCI World ex Australia Hedged AUD Net Total Return Index; Global small companies (unhedged): MSCI World Small Cap Net Total Return USD Index (in AUD); Global emerging markets (unhedged): MSCI Emerging Markets EM Net Total Return AUD Index; Global listed property (hedged): FTSE EPRA/NAREIT Developed Index Hedged in AUD Net Total Return;

Cash: Bloomberg AusBond Bank Bill Index; Australian fixed income: Bloomberg AusBond Composite 0+ Yr Index; International fixed income: Bloomberg Barclays Global Aggregate Total Return Index Value Hedged AUD

Please note: Past performance is not indicative of future performance.

Currency markets

Currency Markets march

Source: FactSet & Insignia Financial, 29 February 2024.

All foreign exchange rates are rounded to two decimal places where appropriate.

Please note: Past performance is not indicative of future performance.

Hi, I'm Roger

I have been helping Australian’s create security in their financial futures for over 20 years.

Common Financial Mistakes To Avoid For A Brighter Financial Future

We all strive for financial freedom, but sometimes, common financial mistakes can hold us back from reaching our goals. In this post, we will explore seven prevalent pitfalls and provide detailed tips to help you manage your money wisely. By avoiding these mistakes,...

Your financial future deserves nothing less than the best!

“Don't settle for second best when selecting a financial planner. Choose expertise, trust, and excellence to ensure a solid foundation for your financial success”. When it comes to managing your finances effectively, seeking the guidance of a qualified financial...

Start the new financial year with these healthy habits!

As a new financial year begins, it's an opportune time to establish healthy financial habits that can set you on a path to financial success. Whether you're an individual or a business owner, adopting these best financial habits can help you navigate the year ahead...

Generating Passive Income: Securing Your Financial Future

In today's world, with the rising cost of living and uncertain economic conditions, more and more individuals are seeking ways to supplement their income and build a secure financial future. While working longer hours or taking on a second job might be feasible for...

A Comprehensive Guide To Direct Share Investing In Australia

Australia is known for its significant interest in share ownership, making it a popular choice for many investors. While direct share investing can be a fulfilling experience, it may not be suitable for everyone due to its perceived risks and complexities. To make an...

Choosing The Right Superannuation Fund For A Comfortable Retirement

As we plan for our retirement, one critical aspect that can significantly impact our financial future is selecting the right superannuation fund. With a plethora of options available in Australia, finding the perfect fit may seem overwhelming. However, armed with...

et_pb_contact_form_0