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Australian Share Market Not Excited Over New Economic Data

By Simon Cooper
November 13, 2020

Recently, the share market held firm after new economic data, including retail trade figures, was released. Investors weren’t moved, but banks and resources gained ground, keeping the market steady.

The Impact of COVID Is Clear

Cases are rising across Europe and the US, while China deals with a new outbreak. To keep cases as controlled as possible, European countries are reinstating tough travel restrictions, which will have an effect on several industries, influencing possible market fluctuations.

Australia looks like it’s joining the elite few that are containing the virus, but our market is still susceptible to what’s happening around the globe. When the first wave hit, the ASX 200 fell 37% in less than five weeks.

The current trend of holding steady is a good sign.

Our Analysis

Energy stocks have been buoyed by higher oil prices resting on the hopes of a US stimulus package being announced soon. Other resources also trended up, setting a solid foundation for a continued steady market. As of October 21:

  • Both Woodside Petroleum and Santos are slowly gaining speed.
  • OZ Minerals and Sandfire Resources both show increasing strength.
  • Diversified miners BHP and Rio Tinto saw small gains.
  • Banks are showing small wins, too. ANZ, Commonwealth Bank and National Australia Bank all improved.

Here’s What We Think

We’re confident our market reflects conviction in our own economic recovery. It’s slow going. Fiscal stimulus is gradual, and this new wave of the virus has spread quickly, so our economy isn’t ready to stand tall on its own. We need support that’s not likely to come by year-end — but it will come.

We’re seeing another cycle of what happened earlier in the year. This means recovery will also come, and the steady market reflects that. With a vaccine on the horizon, this cycle sees an end in sight that is much different than the second quarter when uncertainty reigned supreme.

You Should Feel Reassured

Though we haven’t seen real excitement, market share is trading in a narrow margin. This is a good sign considering continuing uncertainty around lockdowns and the US presidential race.

Your individual concerns are just that — individual. We’re experts in guiding clients through uncertain and confusing market share trends and reactions. Reach out for a free consultation. You can speak to one of Australia’s leading financial experts for advice and analysis of your current goals and how well you’re tracking to achieving them.

Your future is about more than the current market.

Having a combination of short- and long-term plans, a diversified portfolio and benchmark goals is the best strategy to not only ride out current uncertainty but also achieve the future you’ve always dreamed of. You need a solid foundation from which to build your wealth. This might include:

  • Superannuation
  • Tax minimisation strategies
  • Insurances
  • Investment advice
  • Investment portfolio management
  • Retirement planning
  • Estate planning

We never suggest having all your eggs in one basket, which is why we arm you with a variety of financial tools to meet your goals.

It’s easier than you think.

We watch the markets for you. When we manage your portfolio, we make changes in your best interest. You shouldn’t have to watch the market share like a hawk, dreading each small downtick.

Whether you’re a current or prospective client with concerns about the current state of the economy, we know you’re busy. We develop iron-clad roadmaps to success that are fluid and adapt to market concerns and changes in your lifelong goals.

Reach out today.

Simon Cooper

Managing Director

Co-founder and Managing Director at Forward360. Simon ensures all clients get the financial advice they need to reach and exceed their financial goals — both personally and professionally.

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