Market is performing well in the lead up to Christmas

We have been experiencing an end-of-year rally that has been taking the big end of town much closer to the earlier highs of 2022. Many smaller stocks have improved, but no-were near as strongly. There has been another wave of capital raisings that has tended to truncate the revival of this, more speculative end. Three months ago brokers were worried about income, now the big brokers are again starting to suffer deal fatigue as we approach the Christmas shutdown.

Standing back, it seems that there is some sort of equilibrium coming through to market sentiment. Inflation has abated a little and while interest rates are still expected to rise, no-one seems phased by more modest rate rises. Commodity markets have readjusted themselves for the Ukraine War impact. Life goes on.

China's aggressive growth curve used to be the reason for optimism in the market, with its apparently insatiable demand for raw materials underpinning many commodity prices. That has all changed now. There is no slipstream to carry us along anymore. China has torched its credibility , meaning there is a focus on weaning ourselves off dealings with China where possible. Critical metal supply chains are fostering widespread interest elsewhere. Again, life goes on.
 

 WeeklyComm3December2022.pdf