Q2 2023 Catella APAM Investment Market Commentary

Our latest market commentary has just been released. Here’s an excerpt from the report:

“Missing the bottom on the way up won’t cost you anything. It’s missing the top on the way down that’s always expensive.”
Peter Lynch – Famed manager of the Magellan Fund

The quarter can be characterised by “persistence”. Consumers across the developed economies have wrong footed both forecasters and central banks in their ability to endure economic hardship. We have long stood firmly in the camp of higher for longer, and the inflation figures published this quarter have only re-enforced that view. Persistence appears to be everywhere. Our road to a potential recession in 2024 has been a unique one from a historical perspective. Substantial savings built through government support have increased the money supply as well as consumers’ resilience. All of this leads to a tougher and longer task for the Bank of England (BoE). In our view, the move in June to a 5% base rate signalled the Bank’s intention to finally get on top of quickly embedding inflation and effectively “go for broke”. The market certainly turned to that idea in June when it priced in a peak of nearly 6.5%…

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