Market Highlights - A look back at April 2020

Australian Economy – Australia has weathered the current health crisis better than most other developed economies. As expected, most of the data out in April showed early signs of the economic devastation to come from Covid-19. Worryingly, ANZ job ads were down over 10% and the construction and service industries moved into deep contraction. Even though the RBA rejected pushing cash rates into negative territory, they have now fully engaged in quantitative easing (QE) measures used to push longer-term rates down below 1%1.

Global Economy – New U.S. jobless claims in April were over 20 million, representing well over 10% of the workforce. Though many of these are temporarily unemployed, the hit to the U.S. economy from Covid-19 is likely to be huge. March quarter GDP growth in the US and Europe, which still only included the initial economic shutdown, was about minus 1.2% and minus 3.8% respectively1.

Investment Markets – Equity markets enjoyed a solid bounceback from their recent lows in March. US 'megacaps' saw the biggest bounce, leading the S&P500 up over 12% in April. Most other countries saw about half that performance, though all markets still ended the first quarter for 2020 well down2.

Outlook – The coming months will continue to be difficult for the global community. Falling numbers of active cases and hospitalisations are providing some glimmer of hope for economies to kick back into gear in the short-term. However, hard-earned improvement in conditions might be short-lived if communities open up too quickly.

S&P/ASX 200 – 12 months to 30 April 2020

Source: Core Equity Services

Footnotes: 1. TradingEconomics; 2. Bloomberg data .

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