Market Highlights - A look back at March 2017

Australian Economy – Australia has moved a big step closer to taking the record for longest streak without a recession. The Dutch did 103 quarters without having 2 consecutive quarters of negative growth and Australia is now at 101 thanks to a big jump in economic activity in the December 2016 quarter. In chain volume seasonally adjusted terms, GDP grew by 1.1%, following a contraction of 0.5% in the September quarter. Through the year growth was positive at 2.4%1.

Global Economy – Another strong jobs numbers growth out of the U.S. in February, which Trump has been quick to claim as a direct result of his presidency. Employment growth was particular strong for construction, manufacturing and mining. On the global front, the rate of expansion in global manufacturing production accelerated to a three-year high in February, underpinned by stronger growth of total new orders and rising levels of international trade. The headline J.P.Morgan Global Manufacturing PMI rose to a 69-month record of 52.9, with anything above 50 showing an expansion2.

Investment Markets – Apart from a dip in Japan (-1.1%) and a flat U.S. market, equities were strong in the month of March3. European stocks lead the way, bouncing up over 5%, while Australian equities fared well, returning 2.7% for the month.

Outlook – Global tensions seem to be ratcheting up sharply in the age of Trumpian politics. And significant risks seem to be building up at a time when markets are up 15% over the past year. It is always the unforeseen events which cause the most trouble, but there do seem to be some grey clouds forming.

S&P/ASX 200 – 12 months to 31 March 2017

Source: Core Equity Services

Footnotes: 1. Australian Bureau of Statistics; 2. US Dept of Labor; 3. Bloomberg data.

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