July kicked off the “KiwiSaver year” - which runs July to June. Many KiwiSaver members will have seen a nice little extra uplift in their balances during July, thanks to the KiwiSaver government contributions largely being paid out this month. And although $521 (should someone be eligible to receive the maximum amount) may not seem huge - it certainly adds up over time thanks to the magic of compounding returns!

In terms of the global financial markets, July saw a largely positive month of results - despite the many news headlines sparking ongoing fears of recession, economic turmoil and ever-increasing interest rates. 

In particular, the US share market continued its run - with the S&P 500 gaining over 3% in July (in US dollars). This compares to just over 1% gain for our local NZX 50, and just under 3% for Australia’s ASX 200 (in Australian dollars). 

The strong US market gains were mainly driven by optimism around America’s falling inflation levels, which in July came in lower than expected (3% in the YTD to June, down from 4% previously). Tech stocks also continue to lead the US market upwards, fuelling an almost 20% return in the S&P 500 in the 2023 calendar year so far.

Closer to home, NZ also finally saw some mild inflation relief - albeit with the latest figures coming in at 6%, this was still good news having been almost at 7% in our previous quarter. This very cautious optimism was reflected in very mild growth in the local share market - with NZ seeing a very mixed month of July overall. 

On the fixed income side, government bond yields both here and abroad remain volatile but were broadly unchanged in the month. Most central banks (including our own) are in a “watch and worry” phase; studying the economic data to see if the rate increases that have already happened are sufficient to slow down inflation.  It will probably be a few months yet before that picture gets any clearer.

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