Australian Economy – GDP figures released early in the month showed that the economy continues to perform below trend at 2.5% year-on-year1. This was followed by somewhat healthier labour force figures of a drop in the unemployment rate to 6.3%1. A widening trade balance and drop in dwelling approvals further highlight the current lacklustre economic conditions.
Global Economy – As expected, the US has continued at its slow and steady pace, with GDP growth for the 2014 December quarter coming in at a modest 2.2% annualised and the workforce expanding by over 100,0002. Europe remains in sluggish growth, but a healthy manufacturing activity reading and rising economic sentiment show signs of life across the union. And signs of further stimulus out of China has allayed fears of any significant deterioration of Chinese economic growth.
Investment Markets – After a healthy jump in equity markets in February, most developed markets were flat or slightly positive in March. The major exception to this was Chinese shares, which rallied over 13%3 after Premier Li announced the regime's potential efforts to ensure GDP growth targets are met.
Outlook – Somewhat depressed figures out of the US may give Fed Chair Yellen the room to extend the ultra-low interest rate policy for longer than expected. This would generally be good news for markets, on top of further stimulus from Europe and China, but a growing number of unknowns are likely to keep volatility levels elevated.
S&P/ASX 200 – 12 months to 31 March 2015
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 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.