The US market has risen 10% this calendar year and is up 18% from its October 2022 lows, despite widespread investor bearishness around US market prospects. The US does remain more than 10% below late 2021 highs, allowing the bears to continue to label the rebound as just a bear market rally.

Both Australian and US consumer confidence surveys are wallowing at very depressed levels. However, both economies continue to register multi-decade lows in unemployment, and consumer spending has so far remained relatively resilient.

Gaming revenues have shown resilience over time, as the industry tends to be relatively unaffected by economic downturns. Gaming stocks offer the Focus Portfolio resilient growth in a part of the cycle where we believe this is key to outperformance. In this report, we outline our viewpoint on gaming, and detail our key holdings in the sector.

While inflation has proved sticky in recent months, our analysis suggests that we are on the cusp of a significant deceleration in US inflation. As we explore in this report, this should “all things equal” be supportive for risk assets.

While copper has weakened recently due to global economic concerns, long-term we are structurally bullish when it comes to the copper price. Demand for copper is currently subject to a degree of cyclicality, given its wide range of industrial uses which ebb and flow with the state of the broader economy. Longer term, significant structural growth in demand for copper as significant quantities will be needed for the energy transition.

As the US government's deadline to raise the debt ceiling approaches, the debate in Congress is intensifying. In order to meet its obligations, the government needs to agree on a bipartisan solution to increase the nation's debt limit, which controls how much money it can borrow.

Our outlook on the banks has been cautious for some time now, and we have seen more evidence to support our view over the past week. 3 of the 4 big banks have reported half year results, which all share the same common theme: NIMs have peaked.

Last night, Treasurer Jim Chalmers announced a dramatic improvement in the nation’s fiscal position. The FY23 budget is now forecast to register a surplus of $4.2 bn (0.2% of GDP). The improvement in the near-term budget position is due to an unexpected revenue boom underpinned by soaring commodity prices and a strong labour market driving higher company and personal tax receipts. In this special report, our Investment Strategy Group and Planning Team share their views on the 2023 Federal Budget.