Australian Economy – The Australian economy continues to show signs of weakness, with the unemployment rate edging back upwards and construction activity remaining sluggish. Record exports and a subdued exchange rate currently seem to be managing to keep the economy from slipping into recessionary territory1.
Global Economy – The ongoing trade disputes have not seemingly been a cause for economic concern in the US so far, with the broader health of the US economy looking strong. Across the Atlantic, Germany just managed to avoid a technical recession with GDP growth for the September quarter coming in at 0.1%1. For the entire Eurozone, economic growth is still heavily subdued, registering just above 1% per year. This is well below the 2-3% growth rate enjoyed from 2015-2017 with the likelihood of dipping back into another recession growing.
Investment Markets – It was a good month for developed market equities, with most countries experiencing returns of around 3% for the month. Conversely, the escalation in the Hong Kong protests put a strain on the Hong Kong and Shanghai stocks, with both finishing down for the month2.
Outlook – Markets will be hoping for an early Christmas present from Trump and China in the form of a walk-back on some of the scheduled tariffs on each others goods. The recent support of the US for Hong Kong and its criticism of China's treatment of the Uyghurs, have put some pressure on negotiators, but it would seem that both sets of leaders will want to avoid any major hits to their respective economies.
S&P/ASX 200 – 12 months to 30 November 2019
Source: Core Equity Services
Footnotes: 1. TradingEconomics; 2. Bloomberg data .