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July 2019 Economic Snapshot

Economic Snapshot July 2019   In summary     July was all about interest rates, with the Reserve Bank and the Federal Reserve both cutting (0.5% in Australia and 0.25% in the US). Here in Australia, the cash rate and bond yields are at new record lows. The RBA said it will pause to assess […]
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A Will isn’t always the only way!

A Will isn’t always the only way December 2018 You would have heard the saying: “where there’s a will, there’s a way”. This statement is usually used to encourage people who are losing enthusiasm for a task or goal. But it also reflects the way many people feel about estate planning. They think that so […]
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Steps to consider before entering Aged Care

Steps to consider before entering aged care   December 2018   Early planning can take away a lot of the stress and uncertainty that can arise when considering aged care at home or a residential aged care facility. Know what your options are The first option that probably comes to mind is a residential aged […]
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On 1 July 2019 your insurance cover may be changing!

In February this year, the Government passed legislation which prevents trustees of APRA-regulated funds from providing insurance to members with inactive superannuation accounts, unless a member has directed otherwise. It is a common practice for many individuals with an SMSF to also have a secondary APRA-regulated fund which provides them with insurance. This may be […]
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May 2019 – Economic Snapshot

Click here: Economic Snapshot May 2019 final
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The Coalition Wins a Third Term

The Coalition wins a third term – your superannuation policy update in preparation for the end of the financial year The Coalition Government has been re-elected in the 2019 Federal Election, with a small majority of seats in the House of Representatives, after taking a policy of stability for superannuation to the election. After the […]
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Liberal and Labor Superannuation and Tax Policies

The Major Parties’ Superannuation and Tax Policies Liberal-National Coalition Superannuation Australians aged 65 and 66 will be able to make voluntary superannuation contributions without needing to work a minimum amount. Previously, this was only available to individuals below 65. Extending access to the bring-forward arrangements (the ability to make three years of post-tax contributions in […]
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Q & A with Dennis DiBartolo on the Royal Commission

October 3, 2018 / by Altitude Wealth Management / News / 0 Comments
In your view, what impact has the Royal Commission had on the financial services industry? Personally, I think the Royal Commission was well overdue and despite the current pain, will be a positive for the financial services industry in the long run. For too long we’ve seen unacceptable advice given by financial advisers albeit the […]
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May Market Update

US President Donald Trump said he would withdraw the US from an Obama-era nuclear agreement with Iran, and restore economic sanctions, in a move that hurt investor sentiment. Mid-month, North Korea abruptly cut off talks with South Korea, citing military exercises between the United States and South Korea, and threatened to cancel the planned North Korea–US summit. President Trump promptly cancelled the summit, set for Singapore in June, but after a surprisingly conciliatory statement from North Korea, the summit was reinstated.

Simultaneously, trade talks got underway between the US and China, with each agreeing to drop the tariff threats against each other while they continued to work on an agreement. But if investors believed that put an end to trade war fears they were mistaken, as late in the month, the US announced tariffs on steel and aluminum imports from the European Union (EU), Canada and Mexico, sparking promises of retaliation by these parties and reigniting such fears.

European politics spurred market concerns

A political crisis in Italy caused plenty of worries, after two “anti-establishment” parties, the League and the 5 Star Movement, struck an unlikely deal to form a coalition government, only to have their proposed cabinet rejected by the Italian President, because it contained a candidate for Finance Minister who was a self-confessed supporter of Italy withdrawing from the European Union. The president’s intervention to block the coalition plans led to a big selloff in Italian shares and bonds, because of the threat of fresh elections that could have become effectively a referendum on the Euro, but after a reshuffle, the new Italian government was agreed on the last day of the month. Markets were also keeping a close eye on Spain, where Prime Minister Rajoy appeared on the brink of being ousted from office (which did in fact happen in early June.)

Positive US economic data buoyed markets, despite weaker European results

While the geo-political news took over the headlines in May, largely positive economic data and continued robust corporate earnings reports out of the US helped to bolster markets.

US first-quarter gross domestic product (GDP) growth was revised down marginally, from an initial estimate of 2.3% annual growth to 2.2%. While down from the 2.9% annual growth rate of the December 2017 quarter, the growth figure was well ahead of the 1.2% achieved in the March 2017 quarter.

The US unemployment rate fell to 3.9% in April, the lowest level since the end of 2000, with monthly jobs gains averaging 200,000 so far this year. US job openings rose to 6.7 million at the end of April, compared with the 6.3 million Americans who were unemployed, according to the US Labor Department. This is the first time since such record-keeping began in 2000 that the number of available positions exceeded the number of job seekers.

At the end of the eventful month, the Dow Jones Industrial Average had gained 1.4%, the broader S&P 500 was up 2.4% and the technology-heavy Nasdaq Composite index was 5.5% higher.

European data was slightly weaker, with the Eurozone posting a GDP growth rate of 0.4% in the first quarter, slowed significantly from an annual rate of 2.8% to 2.5%. The unemployment rate, however remained at its lowest level since December 2008, sitting at 8.5%. Late in May, the German jobs data report showed unemployment falling to a new record low of 5.2%. The UK economy grew at 0.1% in the March quarter, for an annual rate of 1.2%, its weakest pace since 2012.

In Germany, the DAX index was down marginally, while France’s CAC 40 shed 2.2%. The Stoxx Europe 600 Index ended May up 0.2%, after April’s jump of 3.9%. The Swiss Market Index (SMI) was down 4.8%. In the UK, the FTSE-100 index ended 2.3% higher, helped by a weaker pound.

Mixed returns from Asia

In Asia, first-quarter GDP data in Japan showed the economy shrinking by 0.6% on an annualised basis, breaking the streak of eight straight quarters of economic expansion. But Japanese industrial production increased in April, up 0.3% following March’s 1.4% gain, according to the Ministry of Economy, Trade and Industry.

Chinese factory activity grew at a stronger rate than expected in May, with the official manufacturing Purchasing Managers’ Index (PMI) coming in at 51.9, the highest level since October 2017. (A reading above 50 indicates expansion, while a reading below that signals contraction.) The private Caixin China manufacturing PMI, which focuses on smaller and medium-sized companies, held steady at 51.1 in May, bolstered by a pick-up in production and new orders. China’s official non-manufacturing PMI, a measure of services and construction activity, rose to 54.9 in May from 54.8 in April, the National Bureau of Statistics said. These numbers pointed to sustained growth momentum in China.

On Asian markets, Tokyo’s Nikkei index lost 1.2% in May, the Shanghai Composite index gained 0.4%, after touching a 19-month closing low late in the month, while Hong Kong’s Hang Seng Index retreated 1.1%. In Seoul, the KOSPI index lost 3.7%.

In Australia, the S&P/ASX 200 index added 1.1%. The Organisation for Economic Cooperation and Development (OECD) forecast the Australian economy to grow by 2.9% in 2018 and by 3% next year. The OECD expects unemployment to fall this year from 5.6% to 5.4%, and then to 5.3% next year.

 

 

Disclaimer
Information current as at 31 May 2018. This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs having regard to these factors before acting on it. Past performance is not a reliable indicator of future performance. This article may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, we do not accept any responsibility for the accuracy or completeness of, or endorse any such material. Except where contrary to law, we intend by this notice to exclude liability for this material.

Why I chose to seek advice from a financial planner

(Guest blog) : Mellissah Smith I’m 44 years of age and after finding myself in an unfamiliar territory this month where I was unwell for a number of weeks, my mortality came fast and furiously to the forefront. I’ve been tracking along in life quite nicely and have built a half decent lifestyle for myself. […]
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