Global markets pulled back in August (MSCI ACWI -1.2%), led by the Hong Kong-based Hang Seng (-7.4%) which suffered from both the trade war and month-long protests that have rocked the city. Trade talks continued to deteriorate between the US (S&P 500 -1.8%) and China (CSI -0.9%), with further tariffs being enacted by both sides. UK markets (FTSE 100 -5.0%) were the worst in the West as PM Boris Johnson steers the UK towards a hard Brexit, while European Markets were not as concerned (MSCI Europe ex-UK -0.9%). Emerging (MSCI EM -2.7%) and Asian Markets suffered from the poor global trade outlook (Nikkei -3.8%, KOPSI -2.8%).

Domestically, the S&P/ASX 200 Accumulation Index was down 2.36% in August underperforming most global markets. Healthcare (+3.4%) was the biggest outperformer, primarily due the performance of CSL post its annual report. The sector is well supported in times of earnings uncertainty due to its consistent income drivers. Real Estate (1.8%) also outperformed as investors continue to seek stability in a period of falling interest rates and macro uncertainty. Energy ( 6.4%) and Materials (-7.8%) were again amongst the worst performers as the outlook for global growth worsens amid a
deteriorating geo-political environment. Financials (-3.6%) again lagged as lower interest rates and anaemic credit growth subdue the outlook for the banks.

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.

12 Oct 2019 

Original source: Motor Trader Magazine (Oct 2019)