Australian Economy – With the unemployment rate remaining at medium term lows and the inflation rate under control1, it would seem that the Australian economy is in good shape. However, with construction slowing and house prices falling, there is some concern that Australia's record run of economic growth could be under threat. The most recent rhetoric from the RBA highlights these fears, with the possibility of rates moving back to normal levels in the near term disappearing.
Global Economy – The US economy is still moving along well, despite some more recent data coming out on the softer side. But most eyes have been on the swing to the Democrats in the mid-terms and the consequences that this might have for Trump and the Russia investigation. Across the Atlantic, the EU have agreed to the deal proposed by Brexit negotiators. However, the UK Prime Minister, Theresa May, is not having the same success at home.
Investment Markets – It was another volatile month for stocks with a mixed bag of performance across the globe. The Australian stock market was amongst the poorer performers (-2.8%), dragged back by a strengthening $A. Most other markets finished the month near where they started, apart from a large jump in Hong Kong (+6.1%). This was mainly driven by hope of an end to Trump's trade wars2.
Outlook – Volatility in markets has remained high with uncertainty surrounding Brexit and the Russia investigation keeping investors on edge. Hopefully the holiday season will help settle markets down, but any lull might just be the calm before an even bigger storm.
S&P/ASX 200 – 12 months to 30 November 2018
Source: Core Equity Services
Footnotes: 1. TradingEconomics; 2. Bloomberg data .