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Global equities continued their upward trajectory, buoyed by robust economic indicators and earnings, with a 3% rise in March and a quarterly gain of 14.1%,the strongest since 2013.
Economic Snapshot: Markets rise as inflation eases
Australian equities rose further in January with a 1.2% lift, taking the 3-month advance to 14 %. Banks continued to lead the charge, rising 5.3% with insurance up 5.9% and energy 5.2%.
After lagging markets for much of the year, Australian stocks rebounded sharply in December, rising 7.3% to close at record levels. Interest rates and inflation remain the key data points in focus.
Global equities rose by 9.4% in November, the largest monthly gain since the 2020 COVID recovery, driven by signs of economic moderation in the US and disinflation in developed markets.
Global equity markets dropped a further 2.9% in October taking the year-to-date return to 8.2%. Bond yields continued to climb, undermining valuations across a range of assets, while the Israel-Hamas conflict added to uncertainty and risk aversion.
Investor sentiment turned in September with inflation data suggesting there were risks of further interest rate hikes ahead to cool ongoing consumer price pressures.
Inflation slowed to 4.9% in July, down from 5.4% in June, which cemented expectations of a pause in interest rates.
Global equities rose 2.1% in the month, with a 20% year-to-date gain in AUD terms. Value, small caps, and cyclical-stocks led the rally.
Global equity markets rose 3.1% in June, with a 7.6% return for the quarter. The rally included growth stocks, the IT sector, banks, retailers, small caps, REITs, and materials.
The RBA raised the cash rate by 25 basis points to 4.1% in early June, the second increase since April.
In April, global developed equities saw a slight positive tone, rising by 1.8%, with Europe ex-UK being the standout performer.
Global equity markets rose in March after a tough February.
Global investors faced a reality check in February, reflecting a more cautious view on upcoming central bank decisions.
Financial markets started the year on an upbeat note, with rallies across the board in January. However, the economic data is mixed.
The big question for 2023 is how much damage has been done to economic growth by the higher interest rates designed to tame inflation?
Markets were in a more buoyant mood in November, hoping the worst of the interest rate hikes may be over.
Financial markets respite from previous months on hopes that central banks may slow the pace of interest rate increases
Ongoing strength in the US economy, including higher than expected inflation, led the Federal Reserve to adopt a more aggressive stance on interest rates.
The rally enjoyed by financial markets in July came to an abrupt halt in August, with the key driver the outlook for US interest rates.
After the turmoil of previous months, markets took a more positive tone in July with both bonds and equities posting solid gains.
A combination of strong growth, abundant liquidity, supply chain blockages, and the Ukraine war triggered the biggest resurgence of inflation since the early 1980’s.
May was a volatile month for global financial markets as investors continued to grapple with the array of risks confronting them.
April was a harsh month for financial markets. High inflation, aggressive rhetoric from the US Federal Reserve Bank, the Ukraine war and COVID lockdowns in China, all combined to sour investor sentiment.
In a turbulent month for global markets, Australia’s geographic distance from Ukraine, combined with our role as a commodity exporter, helped our equity market to outperform and the A$/US$ to rally.
Markets React to Russian Invasion of Ukraine
Despite ongoing COVID waves, equities had another stellar year.
Markets continue to grapple with the good news of recovering economies, the bad news of rising inflation risks and the ever-present threat of COVID-19.
The potential impact of COVID-19 on economic activity continues to be a concern for markets, but inflation has also become an issue.
COVID-19 continued to spread around the world, leading to further slowing of economic activity, disruptions to global supply chains, and pockets of inflationary pressures.
Some key readings of economic activity in June were lower than in previous months, leading markets to revisit the “peak growth theme”.
Global investors have been grappling with the trade-off between the benefits of stronger global growth for corporate profits and the potential impact to bond yields and values from higher inflation that might flow from the stronger growth.
Global investors have been grappling with the trade-off between the benefits of stronger global growth for corporate profits and the potential impact to bond yields and values from higher inflation that might flow from the stronger growth.
March saw further good news about the pace of global economic recovery, with the OECD revising up its forecasts for global growth.
March saw further good news about the pace of global economic recovery, with the OECD revising up its forecasts for global growth.
February 2021 saw further improvement in the Australian economy, with higher employment and stronger business conditions and consumer confidence.
January 2021 saw further improvement in the Australian economy, with higher employment and stronger business conditions and consumer confidence.
From a global pandemic that is still around, US presidential elections and aggressive moves from China, to government support, rallying markets and Covid vaccines; a year that started innocently enough turned into one for the history books.
The global financial markets rallied hard in response to an uncontested US presidential election result, successful Covid-19 vaccines, and support from central banks. This marked the end of a rollercoaster 2020 and indicated the start to a more settled 2021.
The resurgence of Covid-19 infections in the northern hemisphere and the uncertain US elections made October 2020 an uncertain month for global equity markets. In Australia, infections declined and interstate restrictions relaxed.
A federal budget in Australia, upcoming elections in the U.S., a slowing global economic recovery, and the ongoing efforts to develop a Covid-19 vaccine. An eventful month draws to a close.
Renewed lockdowns in a number of countries saw progress in managing second waves of infections, resulting in a slow return in consumer confidence in some regions.
