Market & Portfolio Update - July 2021

6 August by Lifetime

Market & Portfolio Update - July 2021

Global share markets had another good month, with the US market performing well. July saw many US companies report their latest financial results, with around 85% of companies beating the market’s expectations. Investments in overseas shares also benefitted from the NZ dollar falling over the month. This added approximately 2% to the portion of your overseas investments where the currency is ‘unhedged’ and free to move with foreign exchange rates.

The global share managers which we employ to manage part of your global share investments both performed well during July. California-based Fisher Investments led the way, supported by their holdings in a number of large US technology companies.  The share price of US technology companies have risen strongly over the past month, with the industry reporting 45% growth in earnings compared to last year. 

The New Zealand and Australian share markets were relatively flat during July. The latest Covid outbreak has seen many of the Australian states move back into lockdown. As a result, businesses which rely on physical stores have been impacted. Several New Zealand based companies were also impacted by the lockdowns, such as Kathmandu and corporate travel software company, Serko. 

by Lifetime

Apart from the COVID blip, the New Zealand share market has enjoyed a decade-long bull market. It’s the kind of market that leads young investors to expect lightning-fast, sky-high returns.  

by Lifetime

In May, the Reserve Bank of New Zealand (RBNZ) released its updated forecast for the Official Cash Rate (OCR) showing rate hikes beginning in the second half of next year. Since then inflation data has come in above their 2% target at 3.3% and the unemployment rate has declined from 5.3% in September last year to 4%, its lowest level since before the GFC.