November Market Update 2016

The Pulse

  • In October equity and bond markets were both a little weaker as investors worried about higher US interest rates and the outcome of the US elections.
  • Crude oil prices were about 3% weaker as oil producer nations failed to agree to production cuts.
  • Chinese economic data was relatively good helped by infrastructure and housing construction activity.
  • The US economy continues to grow moderately with some evidence that wages growth is picking up.
  • The Eurozone economy continues to grow in line with long term trend rates and business sentiment in both the manufacturing and services sectors has improved.
  • Australia’s economy is still somewhat mixed with softness in retail spending and low inflation but the recent lift in iron ore and coal prices should help provide support into 2017.

 

Global economies

In another relatively uneventful month for economic data, investor attention was directed at rising interest rates and bond yields and election uncertainty in the United States.  Economic indicators were on the whole relatively good showing that the global economy continues to expand at a moderating pace.

 

US

In the United States, the initial estimate of third quarter GDP growth came in ahead of expectations showing annualised growth of 2.9%.

 

Europe

In Europe, economic indicators have been relatively good recently.  GDP growth in the third quarter was as expected, at 1.6% year-on-year.  However, purchasing manager indices for both the manufacturing and services sectors were better than expected.

 

China

In China, the economy grew at an annual rate of 6.7% in the third quarter, which was in line with expectations.

 

Asia Region

Japanese economic data continues to show an economy gripped by price deflation and consumers who are reluctant to spend.  Household spending fell 2.1% over the past year and core inflation is running at -0.5% nationwide, despite the unemployment rate falling from 3.1% in August to 3.0% in September.

 

Australia

In Australia, employment fell for the second consecutive month in September and the trend continues to show weakness in full-time employment partly offset by strength in part-time jobs.

 

The information contained in this Market Update is current as at 18/11/2016 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.