Market Highlights - A look back at April 2019

Australian Economy – Australia's trade surplus posted in April would have been record save it were for the previous month's surplus being revised upward. This has been driven by the large jump in materials exporting, which has risen by about 50% over the last 3 years, whilst overall imports have only increased by about 20%. The surplus hasn't put excessive pressure on the currency just yet, which continues to remain low, to the benefit of miners1.

Global Economy – US GDP grew at about 0.8% for the 1st quarter of 2019, which was well above the 0.5% expectation of economists. This puts US economic growth at about 3.2% pa since the large tax cuts with employment, wages and production continuing to show little signs of easing off. Across the Pacific and the world's 2nd largest economy, China, posted GDP growth of 1.4% for the quarter (6.4% for the year), its lowest level since the GFC1.

Investment Markets – April was another good month for equities, with most markets firmly showing green. Japan and Europe were both up by about 5%, whilst most other stock markets we up by 2-3%. Overall, markets have bounced back strongly and regained all the losses incurred in late 2018.2.

Outlook – 'Sell in May and go away' is a mantra that is familiar to stock market participants and the recent run in equities might start to play into this calendar anomaly. The election in Australia might have some ramifications for the Australian economy, but will not affect the likes of BHP and RIO, whose only real concerns would be the Chinese economy and the Australian dollar.

S&P/ASX 200 – 12 months to 30 April 2019

Source: Core Equity Services

Footnotes: 1. TradingEconomics; 2. Bloomberg data .

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