Weekly update from our research partner Investsense
WHAT: Australia's June-quarter trimmed mean inflation rose 0.8%, taking the annual rate to 3.6% from 3.7% and below the Reserve Bank of Australia's May forecast of 3.8%.
WHY: Lower fuel prices, softer domestic travel and slowing new-dwelling inflation did the work, so with inflation now printing below the Bank's own forecasts the RBA has room to stay patient ahead of its August meeting.
WHAT: The US Federal Reserve held rates with three regional presidents dissenting in favour of a hike, and Chair Kevin Warsh offered no forward guidance.
WHY: Bond markets steepened sharply, with 30-year yields up around 11 basis points to 5.2%. Andrew Hunt's read is that Warsh is trusting the long end to do the tightening for him.
WHAT: Microsoft rose 17% after beating on revenue with capital spending below estimates, while Meta fell 9% despite strong results, with costs up 55% against 28% revenue growth.
WHY: Earnings growth across the S&P 500 is looking strong, so it is the cost of producing those earnings that markets are now scrutinising. Capital discipline is being rewarded and spending is not.
WHAT: Apple passed a US$5 trillion market capitalisation on Tuesday, then gave up as much as 11% by week's end after cutting its September-quarter outlook.
WHY: The downgrade came from memory-chip shortages that Tim Cook described as a 100-year flood, making this a supply problem rather than a demand one.
WHAT: Korean stocks fell around 10% over the month, moving in near lockstep with the Nasdaq, while the MSCI World index finished barely 2% off its highs.
WHY: AI related stocks now make up 40% to 45% of the emerging-markets index, so exposure there is increasingly an AI trade rather than a diversifier.
Listen to the Investsense podcast for weekly updates:
Apple: https://podcasts.apple.com/au/podcast/the-investsense-podcast/id1497076117
Spotify: https://open.spotify.com/show/3xR4Vjn77KBpVOj2N15r1p
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