Australian Economy – Another quarter and yet another positive GDP figure with Australia's economy growing by 0.6% from July to September1. This brought the year-on-year GDP growth to 2.8%, its highest level since June 2016. The unemployment rate has remained steady at 5.4% into the end of the year, with another 22,200 jobs being added in November.
Global Economy – Trump and the Republicans delivered on one of their key economic policies by pushing through significant reform to US taxes, in particular, the slashing of the corporate tax rate from 35% to 21%. On the economic front, most indicators are still looking positive, with unemployment remaining near record lows at 4.1%2. Across the Atlantic, European economies have shown steady and improving growth over the past year against the backdrop of the looming exit of the UK from the common market.
Investment Markets – Other than Europe, most equity markets finished the year off strongly. Many markets had a terrific 2017, with the Hang Seng among the best performers with returns of above 35%. The US, Japan and China were all up around 20%, however Australia and Europe were the laggards for 2017, with stock prices in these markets rising about 7%3.
Outlook – The large tax break for US corporates has been a major driver of returns for the recent past. Investors will be looking for signs that the tax reform will be a dynamic source of economic growth rather than simply becoming a static line on annual financials.
S&P/ASX 200 – 12 months to 31 December 2017
Source: Core Equity Services
Footnotes: 1. Australian Bureau of Statistics; 2. US Dept of Labor; 3. Bloomberg data.
LBW Financial Services Pty Limited trading as LBW Wealth Management is a Corporate Authorised Representative of Wealthsure Financial Services Pty Limited (AFSL Lic. No. 326450)
This article has been prepared by LBW's investment committee based on its understanding of current regulatory requirements and laws. It is not considered advice and provides general information pertaining to our ideology surrounding future asset allocation strategies. It does not take into account each client's individual objectives, financial situation or needs. If you would like to know how LBW's understanding of the current environment impacts on your portfolio please contact a Financial Adviser and to discuss your options or before making an investment decisions.
The information contained within the website is of a general nature only. Whilst every care has been taken to ensure the accuracy of the material, WealthSure Financial Services Pty Ltd will not bear responsibility or liability for any action taken by any person, persons or organisation on the purported basis of information contained herein. Without limiting the generality of the foregoing, no person, persons or organisation 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. Our Australian Financial Services Licence is provided by WealthSure Financial Services Pty Ltd (AFSL No: 326450) the WealthSure AFSL applies to financial products only. Please note Finance, Mortgage Broking, General Insurance, Legal Document Drafting, Taxation, Real Estate & Business Coaching are not considered to be financial products.