Australian Economy – A reasonably quiet month on the economic front with mostly soft data washing through the headlines. Prime Minister Gillard has set the election date for later this year, which gives everyone plenty of time to lobby, campaign and make fragile promises.
Global Economy – The 2 biggest economies of the world, the US and China, both continued to show proof of a sustained bounce-back of fortunes, even if the ball is somewhat deflated. Europe's dysfunction continues with Germany growing whilst the south is lost. Also, politics in the Mediterranean seem to be getting shaky as Berlusconi makes his play for another leadership tilt and the Spanish PM faces a corruption scandal.
Investment Markets – 2013 started where 2012 left off with equity markets running hot. China continued to bounce back hard with returns of 6.5% to go with the 18% earned in December. Japanese equities also continued to enjoy life with a weakening yen. At 2.5% growth for January, Europe was the worst performer amongst the world's developed stock markets.
Outlook – Concerns over a heating up share market are starting to gain further traction with a good number of analysts expecting a correction in the short-term. With interest rates staying low for the foreseeable future and company balance sheets and earnings impressing for the most part, markets may yet be tempted to hold an unsteady trajectory upwards... until the next crisis of course.
S&P/ASX 200 – 12 months to 31 January 2013
Source: Core Equity Services