Market Highlights - A look back at September 2018

Australian Economy – The Australian economy has seemingly defied most predictions, seeing a relatively high rate of acceleration in growth in the half of the year. GDP growth for the year ending June 2018 was at 6 year high, while the unemployment rate stayed at 6 year lows1. The low Australian dollar and interest rates seem to be adding good support to an economy that might have otherwise started to struggle as construction activity starts to fall.  

Global Economy – Despite the increasing tensions between the U.S. and China over trade, Trump has seemingly been able to renegotiate NAFTA between the States, Canada and Mexico. With the unemployment rate still below 4% and inflation still well in check1, Trump and his conservative colleagues will likely feel quietly confident heading into the mid-term elections. Across the pond, the UK Prime Minister May is not having such a great time with economic growth stalling and with attacks regarding her handling of Brexit negotiations coming from all sides.

Investment Markets – The Australian stock market gave back some of its recent gains in August, off almost 2% for the month. Most other markets were relatively flat over the same period, however the Japanese market continued its impressive run over the past few years, up over 5% in the past month2.

Outlook – The stimulus to the Australian economy and market from the falling $A will provide a good buffer from a number of dark clouds on the horizon - namely the US-China trade war and the struggling property market/construction industry. 

S&P/ASX 200 – 12 months to 30 September 2018

Source: Core Equity Services

Footnotes: 1. TradingEconomics; 2. Bloomberg data .

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