September Market Update 2016

 

The Pulse

  • Equities traded in a relative tight range in August but finished modestly higher.
  • Crude oil prices recovered 7.5% on talks of possible production freezes from OPEC and non-OPEC countries when they meet in late September.
  • China economic data was a little softer with declines in industrial production and retail sales growth.
  • US economic data was somewhat mixed. The July non-farm payrolls figure was better than expected which lead US Federal Reserve officials to begin talking about further interest rate rises.
  • Economic data in Europe was a little softer with the core annual inflation rate slipping from 0.9% to 0.8% in August.
  • Australia’s economy grew at the strongest annual rate in four years with growth of 3.3% year-on-year in the June quarter. However, household consumption growth was weaker while government spending much stronger than in the prior quarter.

 

Global economies

August was a relatively quiet month in terms of market moving economic data with most of the focus on Janet Yellen’s speech at the Economic Symposium at Jackson Hole and other commentary from US Federal Reserve officials, as to whether they would vote to increase interest rates once more in 2016.

 

US

In the United States, US Federal Reserve officials, discussed interest rate increases and this led the market to price in a 70% chance of a rate hike by December.

 

Europe

Despite the vote to leave the European Union, the UK economy has continued to perform better than expected.  Employment and wages growth were robust in the June quarter and the August services and manufacturing PMI surveys were relatively strong.

 

China

In China, the economy continues to be well supported by government stimulus measures although there was weaker growth in industrial production, fixed asset investment and retail sales in July.

 

Asia Region

The Japanese economy continues to lack momentum with a recent run of weak export, factory output and household spending data.

 

Australia

The economy continues to perform relatively well with June quarter GDP growth of 3.3% year-on-year, the highest annual rate of growth in four years. The result was boosted by government spending and companies investing in inventories, while household consumption growth slowed.

 

The information contained in this Market Update is current as at 21/09/2016 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.