Australian Economy – The Aussie dollar took another dip down against the USD over the month, heading towards lows not seen since 2009. While business confidence and overall activity continues to slow, the unemployment rate did improve in the last month, dipping back to 5.1%1.
Global Economy – Manufacturing and general economic activity in the US for the past month was somewhat mixed but negative on the whole. Jobs are still plentiful and ongoing talks for trade peace with China still seem to be moving in the right direction. In Europe, economic conditions continue to look overly sluggish, with activity and business confidence still pointing towards recessionary conditions.
Investment Markets – Markets took a sizeable hit due to the outbreak of the coronavirus. Hardest hit was Hong Kong (Chinese markets were closed for the last week of the month) and most other markets were slightly down. Having rallied about 8% during the month, the Australian market was the best performer, finishing the month up about 5%2.
Outlook – The recent outbreak from China is sure to provide temporary pain to the global economy. Its extent is not yet known, but certain industries will be damaged by the loss of Chinese spending. Australia is likely to be among the hardest hit, and coming off a devastating fire season, it will likely be necessary for government to loosen purse strings over the coming months in order to avoid a significant downturn.
S&P/ASX 200 – 12 months to 31 January 2020
Source: Core Equity Services
Footnotes: 1. TradingEconomics; 2. Bloomberg data .