Given developments in Canberra, here is a reminder of some of the main market implications from a Labor government.
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Market Update – August 2018
Equity markets appreciated largely supported by strong earnings growth in US while investors tended to ignore geopolitical issues despite the trade-war rhetoric deteriorating sharply over the month.
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Investment returns over next five years are likely to slow
The past five years have seen pretty good returns for well diversified investors. While cash and bond returns have been modest, growth assets have been strong. Average balance growth superannuation funds have returned 8.5% pa over the five years to June and that’s after fees and taxes.
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Trumponomics and investment markets
Since Donald Trump was elected President back on November 8, 2016 we have focussed on whether we will see Trump the rabble-rousing populist or Trump the business-friendly pragmatist. Despite lots of noise – particularly via Trump’s frequent tweets – for the most part Trump the pragmatist has dominated so far.
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Market Update – July 2018
Equity markets generally traded sideways as investors became more sanguine about geopolitical issues despite the trade-war concerns increasing sharply toward month end
and into July.
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Trump’s Oil Slick
Over the past few weeks we have been highlighting the growing divergence between stock market performance and accumulating macro and political risks. The growing list of risks include the potential trade war, weakening Chinese growth and funding pressures in emerging markets.
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Market Update – June 2018
Equity markets rose during May, despite concerns over an Italian exit from the Eurozone toward the end of the month, supported by lower bond yields and buoyant company earnings.
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Should the RBA raise rates to prepare households for higher global rates?
It’s nearly two years since the Reserve Bank of Australia last changed interest rates – when it cut rates to a record low of 1.5% in August 2016. That’s a record period of inaction – or boredom for those who like to see action on rates whether it’s up or down.
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Trading the war
An important role for tactical asset allocation is protecting portfolios against discrete market-moving events that are hard to predict. A US/China trade war is now shaping as a binary event and the impact on markets could be large because investors appear to be assuming that there will not be an escalation.
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Italy is a worry – but there’s 3 reasons not to be concerned about an Itexit and Eurozone shares are attractive
Away from the US the other major geopolitical risk on investors’ radars at present concerns Italy. This year the concern is that the formation of a populist coalition government in Italy with Eurosceptic leanings will drive crisis in Italy and potentially threaten the Euro.
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