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Market Insights September 2023

September 6, 2023
Harvest News
market insights

Current Topics in Markets

In their current mood, it almost seems like equity markets want to put a positive spin on everything. Marginal improvements in US economic data in relation to both inflation and jobs, followed up by a somewhat uncertain (although certainly not hawkish) speech from Jay Powell, the Head of the Federal Reserve, all translated into good news as far as equity investors were concerned. So, while markets sagged in the first half of August, they retrieved those losses in the second half of the month. The market consensus view now is that US rates will remain on hold for the remainder of 2023.

On this side of the Atlantic, the ECB’s Christine Lagarde was clearly more cautious admitting that ‘there is no pre-existing playbook for the situation we are facing today’. Inflation in the Eurozone has remained stubbornly high, and this may point to further rate increases in Europe with peak rates being reached quite a bit later in comparison with the US.

However, even in the US the emerging economic picture is a clouded one at best and the determined optimism currently on display in US equity valuations could mean that markets are setting themselves up for a fall.

Beyond the US and Europe, China continues to struggle with getting its economy back on track after covid although the past week has at least shown a higher level of commitment by the Politburo to providing the necessary stimulus. China remains the sole major equity market in negative territory year to date and could be a real value story for 2024.

equity markets september

Equity Markets

The US equity market is ahead by some 17% year to date. However, as has been widely reported this has been driven by a handful of the tech giants. Stripping these out, the underlying market has grown by a little more than 6%. Valuations for many of the market drivers look stretched at this point and may be vulnerable to correction. We remain just a bit cautious on the short term and prefer consumer and industrial companies over exposures to big tech. The laggard markets this year have been the UK and China, both suffering from concerns over their respective economies. At this point we see value in both of these markets, particularly among companies with externally generated revenues and not dependent on domestic markets.

Equity Market Performances (percentage change in euro terms)

MarketPerformance Aug 2023*Performance 1 year*YTD*

*Source: Financial Times, Financial Express


If we hold with the emerging consensus view that interest rates globally are at or near their peak and that the likelihood is that they will trend downwards in 2024 and 2025, then bonds look like e very good value opportunity right now. Yields on higher quality corporate bonds are in the 5-7% range, well above bank deposits, so investors can benefit from a superior level of income and the prospect of capital appreciation over the medium term as interest rates ease. We see a place for well diversified higher quality bond funds in all portfolios currently.


The post covid investment world has certainly not been kind to property as an asset class. Even residential property vehicles have suffered, despite favourable global supply demand imbalances in many parts of the developed world. This out of favour status for property is unlikely to change in the short term as investors fret about low levels of office occupancy and the effect of higher interest rates. The reality is that occupancy levels in many locations, notably continental Europe, have recovered strongly and that gearing levels in property vehicles outside of the US are low. For investors willing to be patient, there are numerous value opportunities, with high dividend levels an added bonus.


We continue to favour alternatives such as private equity, renewables and infrastructure. Such investments can be a source of relative stability, high income and counter cyclicality, or in some cases all three. Again, we see a place for such assets in all investment portfolios.

Our Fund in Focus for September 2023 is  GCP Infrastructure Investment Trust

As always, you should only consider the investment views contained in this Market Insights update in the context of your own attitude to risk and how such choices might impact your Asset Allocation model. Should you wish to discuss your investment portfolio, please contact Harvest Financial Services on 01 2375500 or email

This marketing information has been provided for discussion purposes only. It is not advice and does not take into account the investment needs and objectives, financial position, risk attitude, liquidity needs, capital security needs and/or capacity for loss of any particular person. It should not be relied upon to make investment decisions.
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