Australian Economy – Business conditions in Australia remained very weak over the past month, with the unemployment rate ticking up to 7.5% and the NAB index of business confidence pointing to more economic pain1. Australia's second Covid wave peaked in early August, with restrictions in Victoria flagged to be eased.
Global Economy – Covid-19 has continued to cause health and economic havoc throughout the world with all developed economies diving into recession. The employment situation in the US has started to improve, however, Congress continues to disagree on a clear pathway of ongoing stimulus1.
Investment Markets – Markets had another good month in August, against the backdrop of the largest global economic contraction on record. US shares led the way, up over 7% for the month, while Australian shares managed a 2% rise2.
Outlook – There have already been a harsh delineation between the market winners and losers from the global pandemic. The upcoming election in the US might distract the news cycle from the ongoing hardships being faced by millions around the world, but with unemployment high and stimulus monies beginning to be tapered, it will be interesting to see how stable the economic recovery will be.
S&P/ASX 200 – 12 months to 31 August 2020
Source: Core Equity Services
Footnotes: 1. TradingEconomics; 2. Bloomberg data .