In what could be a harbinger for the coming year, the S&P/ASX 200 index has been on a roller coaster ride since the market opened on January 3. What’s making investors extremely jittery are fears incoming President Donald Trump’s policies will fuel inflation.
The uncertainty now blanketing the global banking sector adds to the risk of recession, but it comes with a silver lining, AMP’s Shane Oliver told The Inside Network’s Growth Symposium: it’s a sign that central banks’ battle against surging inflation may be nearing its end.
Credit and equity markets both suffered a very bad 2022, as the collapse of negative correlation between stock and bond prices left no safe haven for investors. But 2023 could be a big year for bonds, with analysts warning investors waiting on the sidelines that they risk missing out.
Housing conditions are tipped to remain soft in the year ahead as central banks continue to raise credit costs, but experts still believe an all-out property market crash is unlikely.
Inflationary pressures are expected to ease over the next six months according to federal budget forecasts, while consumer-focused and housing stocks could benefit from government policies aimed at boosting consumer spending and the availability of affordable housing.
More rises are likely to come but analysts say a confluence of factors may cap the official rate at around 3.1 per cent in 2023, providing relief to Australian households.
As interest rates creep north, advisers extoll the virtue of investing away from the family home and into a diversified suite of assets.
