Market Highlights - A look back at October 2018

Australian Economy – A large drop in the Australian unemployment rate to 5.0% (a 6.5 year low) was not enough to save the Australian share market from taking a beating in October1. Property prices continued to fall as the recent spate of construction catches up with the market.  

Global Economy – US unemployment took yet another drop, coming in at 3.7%, with business sentiment and confidence not far from boom levels1. This economic environment, however, isn't being reflected in bond yields, with a significant flattening of the US yield curve continuing (a sign that economic fortunes are not expected to last).

Investment Markets – A dreadful month for equity investors with all markets around the world suffering significant losses. Australian equities yet again failed to hold above the 6000-level, closing down about 6% for the month. Most other developed markets saw similar falls, with Japan and Hong Kong faring the worst with losses of around 10%2.

Outlook – The result of the U.S. mid-term elections might take a while for markets to fully assess, and price volatility might continue to be a concern to investors in Australia and abroad. A low $A should provide a buffer from the worst of the swings in global market sentiment. 

S&P/ASX 200 – 12 months to 31 October 2018

Source: Core Equity Services

Footnotes: 1. TradingEconomics; 2. Bloomberg data .

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