Australian Economy – With GDP growth figures for the first quarter coming in at the lower end of expectations, overall conditions remained subdued but far from dire. And good employment figures and rising exports shows that the Australian economy has some resilience left, especially if the currency continues to depreciate.
Global Economy – Mid-month saw an increase in panic selling and buying with Bernanke's comments of a timeline of reversing QE was deciphered. Data out of Europe is leading many to believe that the continent's economic spiralling is beginning to bottom, with the slowing of contraction and even growth in some areas starting to shine through. The US is still moving along on an upward but bumpy trend and Japan's "Abenomics" looks to be providing stimulus to the ageing nation. However, news out of China in June was more bad than good, with a slowing of economic expansion evident.
Investment Markets – Emerging markets (particularly China) took a big beating in June as fears of a greater slowing in China and the global economy had investors selling. Most equity markets saw some declines with Japan and the US the best of a sad story for markets.
Outlook – The recent sell-off in bond markets, particularly with the fear that the Fed will soon start QE tapering, has again moved bonds into the "defensive" asset arena. With yields pushing higher, the strong drive into equity markets may take a break for the short-term. Though Australian equities are more affected by China and the global landscape in general, a new PM and now not-so-certain election outcome may cause some investors to remain on the sidelines until after September (or whenever the election is finally called).
S&P/ASX 200 – 12 months to 30 June 2013
Source: Core Equity Services