Global markets rallied again in July (MSCI ACWI +0.80%), led by the ASX200 which surpassed pre-GFC highs towards the end of the period. The trade talks between the US and China resulted in President Trump enacting a further 10% tariff on US$300bn of Chinese goods, citing disappointment in the progress of the deal. However, western markets pushed higher on the back of dovish moves by central banks. UK markets (FTSE 100 +2.2%) were higher partially due to the election of Boris Johnson as Prime Minister, who has delivered a form of Brexit certainty. Europe did not reflect the same level of optimism (MSCI Europe ex-UK +0.1%) while US markets (S&P 500 +5.8%, NASDAQ +6.6%) outperformed their Asian counterparts (Hang Seng -2.8%, Nikkei -4.6%, KOPSI -11.8%).

Domestically, The S&P/ASX 200 Accumulation Index was up 2.94% in July. Consumer Staples (9.8%) was the biggest outperformer, as a number of stock specific stories such as A2 Milk and Treasury Wines prompted the market to become less bearish on the sector. Healthcare (5.9%) also outperformed as ResMed reported strongly and CSL pushed higher. Energy (1.7%) and Materials (1.0%) were among the worst performers as the outlook for global growth remains subdued in the wake of ongoing trade frictions and political unrest. Financials (1.7%) also lagged as lower interest rates restrict margin expansion and credit growth prospects remain slim.

Disclaimer

This document has been prepared by DNR Capital Pty Ltd, AFS Representative – 294844 of DNR AFSL Pty Ltd ABN 39 118 946 400, AFSL 301658. It is general information only and is not intended to be a recommendation to invest in any product or financial service mentioned above. Whilst DNR Capital has used its best endeavours to ensure the information within this document is accurate it cannot be relied upon in any way and recipients must make their own enquiries concerning the accuracy of the information within. The general information in this document has been prepared without reference to any recipient’s objectives, financial situation or needs. Before making any financial investment decisions we recommend recipients obtain legal and taxation advice appropriate to their particular needs. Investment in a DNR Capital managed account can only be made on completion of all the required documentation.

Original source: Motor Trader Magazine (September 2019)

11 Sept 2019