After a sharp adjustment in 2022, bond yields have been in a range trading environment since last October. US and Australian long-bond yields are moving closely together, with little current difference in local and US 10-year yields.

The Australian reporting season is underway and the overall mood remains relatively cautious. Although it's premature to offer a definitive assessment of the reporting season, we have spotlighted several critical earnings reports.

Global equities have pushed higher since our June 30 quarterly asset allocation outlook. The global equity market is up a very solid 11% in US$ year-to-date. (14% in A$ terms).

When comparing price to net asset values (NAVs), at face value the A-REIT sector looks cheap. However, this doesn’t capture the whole picture. We believe NAVs are overvalued due to the impending impact of higher bond yields and uncertainty surrounding asset class demand at a sub-sector level.

Gold is often characterised as a store of value (primarily against the long-term corrosive effects of inflation) as well as a portfolio hedge against a range of risks, including general financial market instability, geopolitical tensions, and currency weakness. But what are its prospects today?

The Australian market has been struggling to break out of its recent range trading pattern as aggregate market earnings growth expectations have flatlined across FY23 and FY24.

The upcoming Australian reporting season could be a key catalyst for broader market downgrades. We explore the driving factors including softening demand in cyclical sectors and identify sectors that may be more resilient.

The Australian dollar’s (A$) relationship with the US$ has moved in broad ranging cycles over the long term. With the A$ currently sitting just above 68c, we have a partial 35-40% hedge recommendation for international equity portfolios.