The S&P/ASX 200 hit a record high in early August without much fanfare. It’s a symptom of just how little conviction investors have in the sharemarket.
Australian fund managers will, for the most part, tell you that they are stock pickers and that macro doesn’t matter – performance is about finding the right company at the right price. But that’s not quite right. Macro always matters, sometimes more and sometimes less.
Most active Australian fund managers don’t take macro bets, leaving bottom-up stock selection to drive positioning and letting fundamentals determine returns. Nothing to argue against that here, except that when key macro and market drivers have no trend, or little consistency, fundamentals become even less relevant for near-term performance. Let me explain.
The S&P/ASX 200 Index hit a record high in early August, but without much fanfare – a symptom of just how little conviction investors have in the market and the outlook. Step back and you see more.
That record came against a market that has been largely range-bound since mid-2025, trading somewhere between 8400 and 9100 – bouncing off the lows three times and hitting resistance four times during this period.
This isn’t a usual pattern. Typically, there is greater directionality and consistency in key economic variables, and this allows a fundamental view on stocks and ultimately the market to play out.
Source: https://www.afr.com/markets/equity-markets/how-to-find-an-edge-in-a-market-whipsawing-between-sectors-20260830-p60sq1