As at the 31 May 2022
Observations from May.....
Reversing some relative outperformance in April, Australian shares were down 2.6% versus US markets (excluding the tech heavy NASDAQ) that were broadly flat for the month. Driving the sell off was the Reserve Bank's decision to kick off a monetary tightening cycle with a 25 basis point hike in the cash rate to 35 basis points. This pushed 12-month forward interest rate futures to 3.5% which proved a real headwind for almost all sectors. The Property sector was the worst performer, closely followed by Technology stocks that continued to re-price lower as well.
US earnings and outlook statements seemed to have a more direct flow through to individual names on our market. Woolworths was down 10% for the month after US retailers expressed caution around wages and profit margins, whilst Goodman Group was off 14% after Amazon reported slowing e-commerce growth.
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