Hi there! Welcome to the new look Pendal website... Take a two minute tour to see what we’ve changed.

Mainstream Online Web Portal

Investors can view their accounts online via a secure web portal. After registering, you can access your account balances, periodical statements, tax statements, transaction histories and distribution statements / details.
Advisers will also have access to view their clients’ accounts online via the secure web portal.

Jim Taylor: What’s driving ASX stocks this week

Here are the main factors driving the ASX this week according to portfolio manager Jim Taylor. Reported by portfolio specialist Chris Adams

MARKETS took a glass-half-full view last week, despite data showing inflation was still running hotter than central banks would like.

This was in stark contrast to recent market action.

There were two reasons for this more positive stance:

First, the market interpreted Fed Chair Powell’s remarks after last week’s 0.75 percentage point rate rise as leaving the door open to a more moderate pace of tightening.

The reaction suggests the Fed may have restored a degree of credibility in the market’s eyes.

Second, comments from several big US companies during reporting season suggest that while the economic slowdown is real, it isn’t derailing corporate earnings at this stage.

The S&P 500 gained 4.3% last week, while the S&P/ASX 300 was up 2.3%. Commodity prices rallied, while US 10-year bond yields fell 38bps.


Last week’s inflation data was seen as enough to support today’s 50bp rate increase, but not sufficient to warrant the 75bp “shock and awe” move that many feared.

CPI inflation rose 1.8% in the June quarter — slightly less than the 1.9% consensus expectation and down on the 2.1% gain in Q1.

Annual CPI growth was 6.1%, up on the 5.5% of Q1 and the strongest growth since 1990.

Trimmed mean CPI — the RBA’s preferred measure — rose 1.5% over the quarter, in line with consensus. It is at 4.9% for the year versus 4.7% expected. This remains well above the RBA’s 2-3% target.

Price growth was broad-based with sharp rises in food, transport and housing costs.

Find out about

Crispin Murray’s Pendal Focus Australian Share Fund

US Fed

The Fed raised its target band by 75bps to 2.25-2.5%.

The decision was unanimous and returns rates to a range the Fed considers neutral — though some observers disagree.

The market wanted to hear there was some chance hikes get throttled back. People saw enough in the accompanying statement to deliver this hope.

Chair Powell flagged some softening in spending and production. But he pointed out that labour markets remain strong and inflation elevated.

The Fed would need to see growth and inflation slowing to ease the pace of hikes, he said. Hence the market’s positive reaction to the data print of negative GDP growth in Q2, slipping the US into technical recession.

That said, Powell reiterated that failure was not an option in achieving price stability.

He could not rule out another out-sized rate hike for September, depending on the data. He wanted to see “compelling evidence” of slowing inflation in the core Personal Consumption Expenditures price index.

Powell also noted the natural rate of unemployment was likely a lot higher today than prior to the pandemic. At 3.6% the labour market looks extremely tight — and hence a generator of primary inflation.


The US economy contracted 0.9% in the June quarter after falling 1.6% in Q1 — signalling a recession.

But it does not feel like a recession, given strength in the jobs market and an unemployment rate of only 3.6% in the past four months. This remains a key factor to watch.

Follow Pendal’s The Point podcast on Apple, Spotify or Google

Unemployment benefit applications last week were the highest this year, which may signal a shift.

Consumer spending rose 1% annualised, down from 1.8% in the previous quarter.

The slowing pace of inventory restocking was a big draw-down on economic growth. Changing consumption patterns have left many retailers with excess stock that needs to be discounted and cleared.

Most economists have growth in the September quarter and for calendar 2022 — so the current contraction is not expected to continue.

US inflation

A few other data points indicate that inflation remains high.

The Employment Cost index rose faster than expected, up 1.3% for Q2 and 5% year-on-year.

However the market is seeing signs of near-term softening in labour markets and at this stage seems happy to look through this print.

The Core Personal Consumption Expenditure index (which excludes food and energy) rose 4.8% in June, up from 4.7% in May. Prices rose 0.6% in June, following several months of 0.3% increases. Consensus expected a 0.5% gain.

One positive is that US petrol prices have now fallen for more than 40 days straight.


Last week was strong across the board.

Every major equity index except Japan made gains, while commodities and bonds were both stronger.

It topped a strong month. The S&P 500 gained 9.2%, the NASDAQ lifted 12.4% and the S&P/ASX 300 moved ahead 6%.

US mega-cap stocks caught a strong bid, reflected in growth outperforming value.

So far 56% of US companies have reported Q2 results.

About 75% have delivered better than expected EPS results, versus an 81% average over the past year and 77% over five years.

Sustainable and 
Responsible Investments 

Fund Manager of the Year

Overall, earnings are on track to rise 6% — the slowest rate since the end of 2020.

Amazon delivered an unexpected loss for the quarter — though sales for the quarter were up 7% to US$121bn versus $119bn expected.

Management guided to $125-130bn of sales next quarter, versus $126bn consensus. Crucially, management indicated it was getting costs under control and productivity at fulfilment centres was improving.

Revenue grew 33% for Amazon Web Services and advertising was up 18%, continuing the theme that the stronger franchises are taking revenue from the weaker franchises. Amazon shares were up 29% in July — their best month since October 2009.

Intel shares tanked after missing quarterly profit and revenue expectations. Revenue fell 22% — the biggest drop in a decade. The chip-maker flagged weaker PC sales and poor execution on a rollout of a new generation of chips for data centres.

Microsoft’s 12% revenue growth fell short of expectations. However an upbeat outlook saved the day, with management expecting double-digit growth in sales and operating income for FY23.

Apple revenue rose 2%, driven by stronger-than-expected demand for iPhones. Sales rose 2% while the market was expecting a 3% fall. CEO Tim Cook said he was seeing pockets of softness but expected even stronger year-on-year revenue growth next quarter.

Google’s parent Alphabet reported sales up 13% on the previous comparable period. It was the slowest growth in two years as advertising decelerated in many areas. Net income was down 14%. The company has slowed down hiring plans.

Meta (previously Facebook) reported a decline in revenue versus the previous comparable period for the first time and a third sequential fall in operating profits. Ad revenue declined 18% and pricing fell after recent strong gains. Meta also flagged slower hiring.

Shopify’s stock fell 14% after cutting 10% of its global staff in response to the reversal of sales back to physical retail.


In Australia materials (+5%) led the market higher as miners dominated the leader board, led by the lithium and EV-related names.

Real estate (+3.9%) was also strong.

Health care (-0.8%) lagged, as did consumer discretionary (-0.3%).

About Jim Taylor and Pendal Focus Australian Share Fund

Drawing on more than 25 years of experience investing in top-performing Australian companies and a background in accounting, Jim manages our Long/Short Fund and co-manages our Imputation Fund. He is a Chartered Accountant with membership of the Australian Institute of Chartered Accountants.

Pendal Focus Australian Share Fund is managed by Crispin Murray. The fund has beaten its benchmark in 14 years of its 18-year history (after fees), across a range of market conditions. Find out more about Pendal Focus Australian Share Fund here.

Pendal is an independent, global investment management business focused on delivering superior investment returns for our clients through active management. 

Contact a Pendal key account manager here

This information has been prepared by Pendal Fund Services Limited (PFSL) ABN 13 161 249 332, AFSL No 431426 and is current as at August 8, 2022.

PFSL is the responsible entity and issuer of units in the Pendal Focus Australian Share Fund (Fund) ARSN: 113 232 812. A product disclosure statement (PDS) is available for the Fund and can be obtained by calling 1300 346 821 or visiting www.pendalgroup.com. The Target Market Determination (TMD) for the Fund is available at www.pendalgroup.com/ddo. You should obtain and consider the PDS and the TMD before deciding whether to acquire, continue to hold or dispose of units in the Fund.

An investment in the Fund or any of the funds referred to in this web page is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested.

This information is for general purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient’s personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation.

The information may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information is complete and correct, to the maximum extent permitted by law neither PFSL nor any company in the Pendal group accepts any responsibility or liability for the accuracy or completeness of this information.

Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance.

Any projections are predictive only and should not be relied upon when making an investment decision or recommendation. Whilst we have used every effort to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not take into account known or unknown risks and uncertainties. The actual results may differ materially from these projections.

For more information, please call Customer Relations on 1300 346 821 8am to 6pm (Sydney time) or visit our website www.pendalgroup.com

Keep updated
Sign up to receive the latest news and views