As we enter the final quarter of 2024, global and Australian markets are showing promising signs of resilience and growth. In this update, we highlight key trends and events shaping the investment landscape and what they could mean for your financial strategies.
Global market overview
Global equity markets ended the September quarter on a high note, rebounding from a mid-year 7% correction driven by concerns over a potential US recession and Japan’s surprising interest rate hike. Despite these challenges, several positives emerged, including a retreat in global bond yields and oil prices. The US economy has maintained a soft landing trajectory, with inflation steadily easing toward target levels.
Key sectors like property, infrastructure, and equities posted strong gains, while bonds benefited from declining interest rates. However, China’s ongoing economic challenges have weighed on commodity prices. Encouragingly, late-quarter stimulus measures in China have spurred a recovery in resource stocks, contingent on global growth prospects.
Geopolitical risks, including ongoing conflicts in Eastern Europe and the Middle East, remain significant concerns, with the potential to disrupt global trade and commodity markets. Following Donald Trump’s victory in the recent U.S. presidential election, expectations are building around possible shifts in U.S. policy on foreign relations, global trade, and the budget deficit. While uncertainties surrounding legislative changes have prompted cautious market reactions, optimism has emerged in areas anticipating pro-growth policies, reflecting investor confidence in the administration’s economic agenda.
Australian financial landscape
In Australia, slowing inflation has been a key driver of optimism. August’s headline inflation of 2.7% and core inflation of 3.4% are nearing the Reserve Bank of Australia’s (RBA) target range, setting the stage for potential rate cuts as early as December 2024 or February 2025.
The Australian share market has gained momentum across most sectors, with materials and energy stocks rallying following recent events in China and the Middle East. The banking sector has been a standout performer, although upcoming earnings reports and AGM updates in November will reveal whether these gains are sustainable.
Australian property has emerged as the top-performing asset class over the past year, delivering a remarkable 45.9% total return. This performance has been fueled by declining bond yields and easing interest rate expectations, with leaders like Goodman Group (GMG) and Charter Hall (CHC) driving returns.
Meanwhile, the Australian dollar (AUD) has risen 5 cents over the past year, now trading at $0.69. As the US Federal Reserve prepares to cut rates further, the AUD could see additional strength.
Outlook and key takeaways
Global and Australian markets continue to show resilience, buoyed by easing inflation, stabilising interest rates, and robust performance across key sectors. However, geopolitical uncertainties and potential shifts in U.S. policy following Donald Trump’s election victory remain pivotal factors shaping the investment landscape.
For Australian investors, property, equities, and a stronger local currency present compelling opportunities. Strategic tax planning and investment management are essential to optimising returns in this dynamic environment.
Advice to thrive in changing markets
Navigating market volatility and capitalising on growth opportunities requires a trusted financial partner. Whether you’re seeking wealth management services, tax planning, or business advisory solutions, LDB provides comprehensive support tailored to your needs.
To discuss your financial goals and explore our range of services, contact LDB at (03) 9875 2900. Together, we’ll help you build a strategy for success.
