Menu

Market Highlights - A look back at August 2014


Australian EconomyA large jump in the unemployment rate up to 6.4%1, as well as a plummeting iron ore price, provided some gloom in the month of August.  But there are signs that the construction industry is doing a good job in rebalancing the economy away from our resource exporting, which is helping to keep business and consumer sentiment somewhat buoyant.

Global Economy – Another good month for US job growth, despite a tick up in the unemployment rate2, has provided further evidence of sustained growth in the world's largest economy.  Fears over a stagnating Europe were realised, with France and Italy seemingly back in recession, despite the ongoing strength of Germany and the UK.  And China's recent bounce in manufacturing also seems to be slowing.

Investment Markets – Most markets had a poor start to the month, with drops of around 5-10%.  But overall, the US markets bounced back well from a disappointing July, up almost 4% for the month3. European markets were also up, but Japanese markets retreated, whilst Chinese and Australian equities finished flat.

Outlook – Sanctions over Russia, and likely economic retaliations, are a short-term threat to market stability, along with the end to the US Fed's bond purchasing program. This may be why Europe is now looking at beginning their own QE efforts, with money looking to start to flow out of the European Central Bank to help entice greater lending and expansion.

S&P/ASX 200 – 12 months to 31 August 2014

Source: Core Equity Services

Footnotes: 1. Data from Australian Bureau of Statistics; 2. Dept of Labour, USA; 3. Bloomberg data.

 LBW Financial Services Pty Limited is a Corporate Authorised Representative of Wealthsure Pty Limited (AFSL Lic. No. 238030)

LBW Financial Services Pty Limited is an authorised representative of Wealthsure Pty Ltd, AFSL 238030, ABN 93 097 405 108.  The information contained within these articles is of a general nature only.  Any rates (tax rates, Centrelink rates, exchange rates, etc) are correct at time of publication and are subject to change.  Whilst every care has been taken to ensure the accuracy of the material contained herein at the time of publication, neither the author, authorised representative, nor licensee will bear responsibility or liability for any action taken by any person, persons or organization on the purported basis of information contained herein.  Without limiting the generality of the foregoing, no person, persons or organization should invest monies or take action on reliance of the material contained herein but instead should satisfy themselves independently of the appropriateness of such action.