Lonsec Market Commentary – November 2017
The Australian share market looks set to finish 2017 on a positive note, with the S&P/ASX Accumulation Index gaining 1.64% in November, albeit under-performing global stocks.
In a continuation of October’s trends, the leading sectors were again Information Technology (+4.48%) and Energy (+4.15%), which has recovered from a mid-year slump to resume its rally. Similarly, Telecommunications (-1.60%) was at the bottom of the heap and the only negative sector.
The Australian economy grew at just below its trend growth rate in the September quarter, supported by a boost in consumer spending. While advanced economies including the US, Europe, Canada and the UK have begun the task of tightening policy, monetary conditions remain expansionary.
The RBA has maintained the cash rate at 1.50% for well over a year, and appears content to wait and see how high other banks go and how quickly.
In the meantime, the RBA’s growth forecast of 3.0% over 2018 is realistic, but may be a touch on the optimistic side. While there has been continued improvement in business conditions and the employment situation, low wages growth remains a sticking point.
(Lonsec November 2017, Issue Date: 11-12-2017)