Australian Economy – As expected, data for the third quarter of 2020 showed the Australian economy pushing out of its Covid recession. This was backed up by a 90,000 rise in employed persons in the month of November. Encouragingly, despite trade retaliation from China, Australia has been able to maintain a healthy trade surplus1.
Global Economy – With the formal selection of presidential electors by the US states in mid-December, there seemed to be no real remaining challenge to Biden's win. While that issue seemed to be resolved, the rollout of vaccines does not seem to be slowing the spread and devastation of Covid through the US and the Northern hemisphere. Across the Atlantic, the UK and EU were able to reach a last gasp trade deal to start 2021.
Investment Markets – Markets finished the year strongly with most developed markets up around 3%. Australian equities lagged a little, but still managed a December monthly return of over 1%, finishing down 1.4% for the calendar year2.
Outlook – The ghosts from 2020 are still likely to cause plenty of concern for market participants. Most eyes will be on the policy setting schedule of the new US administration, with rhetoric towards China likely to be of high concern to investors.
S&P/ASX 200 – 12 months to 31 December 2020
Source: Core Equity Services
Footnotes: 1. TradingEconomics; 2. Bloomberg data .