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Market Update 1 July 2019 to 30 September 2019

Highlights
  • A volatile but positive quarter for equity markets
  • The ASX 300 accumulation index returned 2.55%
  • The MSCI Global total return index returned 4.6% in AUD
  • The AUD fell against the USD, finishing at 67.6c
  • The FES Super Smoothed option returned 2.31%

The three months to 30 September 2019 were characterised by heightened volatility as markets responded to escalated trade tension, rates cuts in the United States (US), a drone attack in Saudi Arabia and protests in Hong Kong.The Australian Share Market saw a rotation from growth and momentum stocks to value names but the index maintained a positive trajectory.
 
Activity in the US manufacturing sector (PMI) was revised slightly higher over the quarter, signalling a modest improvement in manufacturing sector conditions. However, consumer sentiment fell over the same period. Annual core US inflation rose to 2.4% in September.

Bond yields in Australia rallied over the quarter as the Reserve Bank of Australia delivered two successive rate cuts for the first time in 6 years.  The Australian Government 10-year bond yield finished the quarter at 1.02%.

Global growth continues to be soft however central banks are providing significant support through accommodative monetary policy. Consensus opinion suggests that this is likely to continue for the foreseeable future. 

At the time of writing, markets have maintained their strength and barring a near term negative event, the December quarter should be positive.

29 November 2019