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Investment trends

See below to find out how Australian and international share markets, bonds and currencies have been performing in recent months.

  • Global volatility sees mixed results

    29 June 2018

    Global share markets rose 1.4% (AUD hedged basis), which masked significant volatility and mixed results in May 2018. Geopolitical tensions remained elevated, with additional levies on steel and aluminium announced by the US impacting major trading partners. Concerns over Italy’s intentions to remain in the EU weighed on European share markets. OPEC and Russia indicated they were potentially willing to wind-back oil production cuts leading to declines in global oil prices.

    In Australia, May saw the release of the Federal Budget which outlined tax cuts for low- and middle-income earners and over $25 billion worth of infrastructure spending.

    US buoyed by positive economic data

    The US share market rose 2.4% in May buoyed by positive economic data – unemployment fell to 3.9%, consumer confidence closed in on 17-year highs and inflation edged higher to 2.5%.

    Small Caps rebound, Large Caps underperform

    The S&P/ASX300 Accumulation Index rose 1.2% in May as Small Cap stocks rebounded, while Large Caps slightly underperformed. Healthcare (5.5%) and Consumer Discretionary (5.3%) were the top performing sectors, while Telecommunications (-10.1%) and Financials (-0.1%) detracted. The AUD appreciated slightly against the USD (0.2%) but was much stronger relative to the Euro and Pound.

    Bonds

    The yield on 10-year Australian and NZ Government bonds fell to 2.6% and 2.7% respectively. Elsewhere, US 10-year yields fell to 2.7%, UK 10-year yields fell to 1.4%, German 10-year yields fell to 0.5% with Japan remaining broadly flat.

    Source: JANA

  • Global equity markets rebound - outlook still mixed

    18 May 2018

    Global equity markets gain in mixed political environment

    Global equity markets rebounded over April. With a macroeconomic environment appearing more inflationary, bond prices were under pressure. Global bond markets declined 0.4% on an AUD hedged basis and US 10 Year Treasury yields touched 3% for the first time since 2014.

    The political environment was mixed, with China responding to US tariffs, tensions in Syria seeing the oil price rise over 5%, and easing of tensions on the Korean peninsula.

    Australia outperforms in April

    The Australian market outperformed, with the ASX300 posting a monthly return of 3.8%. Aside from Financials, all sectors saw positive performance, with Energy, Materials and Health Care the standouts. The Royal Commission into Financial Services led to concern about possible constraints on financial institutions, with AMP and IOOF hardest hit. The RBA held rates at 1.5% for the 18th month in a row.

    Currency, markets and global yields

    The MSCI World Index ex-Australia (hedged into AUD) rose 2.0% over April. The AUD depreciated against the USD, as the market responded to higher US interest rates. However, the AUD appreciated against the Yen, the Pound and the Euro. In the US, the corporate reporting season saw over three quarters of companies beat earnings expectations. Results from large US technology stocks were exceptional, despite negative sentiment.

    April yields rose across most developed markets, with the US 10-year yield (2.9%) higher than the Australian 10-year yield (2.8%) for the first time in 18 years. UK 10-year yields rose to 1.4%, Euro to 0.6% and NZ to 3.0%.

    Source: JANA

  • Sharemarkets struggle during March

    As at 31 March 2018

    US and Australian share markets

    President Trump imposed tariffs on over $50bn of Chinese imports – the Chinese responded with tariffs on $3bn of US imports, sparking fears of a trade war. Further contributing to share market weakness were concerns regarding the 'FANG' stocks (Facebook, Amazon, Netflix, Google/Alphabet), which were sold-off sharply following Facebook's privacy breach.

    The US share market (S&P 500) slid 2.7%. Due to the broad-based growth observed in the US economy, the Federal Reserve raised rates by 0.25% to a target range of 1.5% to 1.75%. These factors impacted global markets, as the MSCI ex-Australia (hedged) returned -2.2%.

    In Australia the ASX 300 fell by 3.7%, negatively impacted by global markets and data indicating slowing growth. The RBA left the cash rate on hold at 1.5% for a 17th consecutive meeting, citing subdued wage growth and low inflation.

    Bond markets

    The yield on 10-year Australian and NZ Government bonds fell to 2.6% and 2.7% respectively. Elsewhere, US 10-year yields fell to 2.7%, UK 10-year yields fell to 1.4%, German 10-year yields fell to 0.5% with Japan remaining broadly flat.

    Source - JANA

 

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