Lonsec Market Commentary – December 2017
The S&P/ASX 200 Accumulation Index rose 1.8% in December, with the energy and materials sectors rallying in the final month of 2017. In the US, the S&P 500 fell -1.6% in AUD terms but pushed to record highs through the month in both AUD and USD terms. The Dow Jones Index also rallied through December, breaking through 25,000 points in early January.
While there was no monetary policy meeting of the RBA in January, December’s minutes revealed the board’s continued ambivalence towards domestic conditions. Wages remain stable at a low rate, despite the 3.3% increase in awards and minimum wages in the September quarter.
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 central banks go and how quickly. Although the September quarter GDP data showed growth of only
2.8% over the year with consumption spending flat, a range of other releases have provided some grounds for optimism.
(Lonsec December 2017, Issue Date: 11-01-2018)