Australian Economy – A rate cut from the RBA was expected early in the month, especially with a string of softer data piling up. Jobs numbers in particular have become somewhat weaker along with sluggish growth elsewhere.
Global Economy – US elections and upcoming political change in China created heightened tensions in October along with lower market turnover. Sandy's battering of the US east coast, which is set to cost hundreds of billions of dollars in rebuilding, saw US markets close and the oil price jump. Across the Atlantic, recession-hit Europe continued to struggle, but the official launch of the ESM (bailout fund) was welcomed as a hopeful source of medium-term stability.
Investment Markets – Another good month in general across markets with Australia among the best performers of the developed world markets. The US lost a bit of ground due to Sandy and the election unknowns. Chinese markets also seemed a bit volatile.
Outlook – Political shifts in the world's two biggest economies will be digested over the coming months, but may not play any major role in spurring on economic growth. But with 2 large unknowns out of the way, the markets are expected to enjoy a little bit more breathing space and calm, though concerns about the US "fiscal cliff" will keep everyone on their toes.
S&P/ASX 200 – 12 months to 31 October 2012
Source: Core Equity Services