May Market Update 2016

[vc_row][vc_column width=”1/1″][vc_column_text]The Pulse

  • The recovery in equity and commodity prices continued in April helped by reasonable economic data and commentary from central banks that implied interest rates would remain lower for longer
  • Oil prices continued to move higher, up another 20% in April. Iron ore prices rose 23% over the month
  • China growth figures were reasonably solid
  • US economic data was on-balance somewhat mixed, in part due to the stronger US Dollar which has hurt certain industry sectors such as exporters
  • Economic data in Europe has been stronger-than-expected, although inflation remains low
  • Australian business conditions and employment levels have remained strong, but inflation in early 2016 was very weak
  • RBA cuts the cash rate from 2.00% to 1.75%

 

Global economies

Developed market equities rose marginally in April helped by cautious commentary from the US Federal Reserve and European Central Bank and reasonable economic data in Europe and China.

 

US

The initial estimate of Gross Domestic Product (GDP) growth in the first quarter of 2016 was a little disappointing with annualised growth of just 0.5%, down from 1.4% in the prior quarter.

 

Europe

First quarter GDP growth came in at 1.6% for the year, which was higher than expected, with the Spanish economy continuing to grow strongly.

 

China

GDP growth in the March quarter rose to be 6.7% higher over the past year and there were stronger-than-expected rebounds in industrial production, retail sales and fixed asset investment.

 

Asia Region

In Japan, deflation pressures continued with the consumer price index falling 0.1% year-on-year in March pointing to deflationary pressures in Japan.

 

Australia

The RBA reduced interest rates from 2.00% to 1.75% at its May meeting and March quarter CPI was much weaker than expected.

 

The information contained in this Market Update is current as at 12/05/2016 and is prepared by GWM Adviser Services Limited ABN 96 002 071749 trading as ThreeSixty Research, registered office 105-153 Miller Street North Sydney NSW 2060. This company is a member of the National group of companies.

Any advice in this Market Update has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on any advice, consider whether it is appropriate to your objectives, financial situation and needs. 

Past performance is not a reliable indicator of future performance. Before acquiring a financial product, you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product.[/vc_column_text][/vc_column][/vc_row]

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