Clime Investment Management Limited

Strong US retail sales data and Walmart's robust results have boosted Wall Street and investor confidence, suggesting the US economy will avoid a recession and achieve a soft landing.⁠ ⁠ For more information follow the link: https://lnkd.in/gVRR_MKh

Central bank independence is not a factor of modern economic management that we should take for granted. Indeed, there is a long and checkered history of government interference with the setting of monetary policy that older market heads will readily recall.⁠ ⁠ For more information follow the link: https://lnkd.in/gdr8MMCk

In her testimony before Australia’s parliament, Governor Michelle Bullock reiterated the RBA's view that it is "premature to be thinking about rate cuts" given inflation is "still too high". That said, Governor Bullock added the caveat "circumstances may change." ⁠ ⁠ For more information follow the link: https://lnkd.in/gR8Nv7k2

Data released a couple of weeks ago showed the US unemployment rate rising to 4.3%, with nonfarm payrolls increasing by only 114,000 in July – both readings were significantly worse than expected. This breached the Sahm Rule and amplified recessionary fears, negatively impacting risky assets like the S&P 500.⁠ ⁠ For a couple years, some economists have forecast an imminent recession because of the Fed’s campaign to hike interest rates, which are intended to slow the economy to contain inflation. Historically, high interest rates make borrowing and spending so costly for businesses and individuals that the economy nosedives sooner or later.⁠ ⁠ For more information follow the link: https://lnkd.in/gV5XvM3f

China's economy is struggling. July data suggest the government will have to provide more stimulus to meet its 5% economic growth target for the year. Last month saw an unusual decline in bank loans, suggesting a lack of confidence among businesses and consumers, potentially leading to reduced investment and spending. ⁠ ⁠ For more information follow the link: https://lnkd.in/g95dxhVR

Clime Investment Management is delighted to announce the appointment of Steve Lambeth as Portfolio Manager for Australian Equities. In this newly established role, Steve will collaborate closely with Will Rigall, Clime's Chief Investment Officer, and the entire investment team to oversee and enhance Clime's diverse range of investment portfolios. Steve Lambeth joins us with over two decades of extensive experience in the funds management industry. His most recent role was as a Senior Analyst at Bennelong Long Short Equity Management, where he conducted in-depth research and analysis of various ASX-listed companies. Prior to his tenure at Bennelong, Steve held significant positions at JCP Investment Partners and Wallara Asset Management, both esteemed Melbourne-based boutique investment firms specialising in Australian equities. We are thrilled to welcome Steve, whose impressive credentials and vast experience across different funds and investment environments will be a valuable asset to Clime. Steve is not only a seasoned and passionate investor; he also deeply values the responsibility of managing clients' investments. His commitment to this responsibility is further demonstrated by his role on the Board of Trustees for a Victorian charitable fund, where he oversees the fund’s direct Australian shares portfolio. Steve holds a Bachelor of Commerce with Honours from Melbourne University and a Bachelor of Commerce from Deakin University. Additionally, he is a CFA Charter holder, accredited by the CFA Institute. We look forward to the contributions Steve will bring to our team and the continued success of Clime Investment Management.

On the 7th of August, the RBA decided to leave rates unchanged at 4.35%. This was what the market expected, and share markets, bonds and the currency were relatively unmoved by the news.⁠ ⁠ For more information follow the link: https://lnkd.in/gGKG4cKy

It happens very slowly and then all of a sudden. The positive narrative in investment markets seems to have been upended in the space of a week. Since the start of August, nervousness has become rife. In the US unemployment is rising, stocks are falling, and bond yields are well below short-term interest rates. These are all the usual harbingers of recession.⁠ ⁠ For more information follow the link: https://lnkd.in/gztP_2x2

China is slowing, Europe is slowing, and the US economy is also in the process of slowing down over the coming quarters. As a result, commodity prices are falling.⁠ ⁠ For more information follow the link: https://lnkd.in/dBH32EUJ

July was a strong month for the ASX300, pushing the index to new record highs, however, the market is now looking a little stretched.⁠ ⁠ With the FY24 reporting season just around the corner, the market PE is trading around 17.1x, well ahead of its 10-year average, indicating it is clearly expensive in relative terms.⁠ ⁠ For more information follow the link: https://lnkd.in/gSjWCE8C