Market & Portfolio Update – October 2024

The Reserve Bank of New Zealand reduced the Official Cash Rate from 5.25% to 4.75% in October. While an interest rate cut was widely expected, the extent of the cut was being debated leading up to the announcement. The Reserve Bank felt inflation was comfortably converging to the midpoint of their 1-3% inflation target and decided on a 0.50% interest rate cut. The market was relatively pleased with the size of this cut, helping the NZX50 finish the month up a modest +1.7%.

The global share market had a positive month, up +1.6%. The US market had a flat month, with investors preparing themselves for the US election. While the election result isn’t expected to impact markets in the long term, certain industries directly impacted by different policies are expected to portray short-term movement depending on the election result.

Australia reported inflation of 2.8%, with the market expecting interest rates to remain steady at 4.35% for a while as the Reserve Bank still wants to see significant progress on their underlying inflation.