Kris Walesby

• Equity markets initially sold off as the US election result became apparent, but quickly recovered on the promise of spending-led growth stimulus. The S&P/ASX 200 ended the week up 3.7%, the S&P 500 gained 3.8% and the EURO STOXX 50 added 2.6%. Bond yields reflected higher rate and inflation expectations under the new administration with the US 10 Year Treasury Yield increasing by 0.37%, nearing a 12 month high.
• Precious metals retreated as pre-election defensive positions were unwound, with gold declining 5.1% for the week. Iron Ore jumped 22.8% on speculation of increased demand from Trump-led infrastructure spending.
• The Australian dollar ended the week down over 1c against the US dollar at just below US 75.5c, having rallied to as high as US 77.8c pre-election. The US Dollar Index, which measures the exchange rate between the US dollar and a selection of major world currencies, gained 2.1% for the week.The Australian dollar ended the week down over 1c against the US dollar at just below US 75.5c, having rallied to as high as US 77.8c pre-election. The US Dollar Index, which measures the exchange rate between the US dollar and a selection of major world currencies, gained 2.1% for the week.
• The Australian ETF market saw net outflows of A$8m from domestically domiciled ETFs, with the biggest outflows being from Australian equities, US dollars and bearish equity funds. Inflows were into a range of equity funds and defensive assets such as gold and cash.  

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Equity markets sold off last week on US political uncertainty with election polls narrowing dramatically (see Chart of the Week). The S&P/ASX 200 ended the week down 2%. The S&P 500 lost 1.9% and as at Friday had declined for nine consecutive days – its worst losing streak since 1980. Top ETF performers for the week were bearish equity funds, gold and gold miners.

The US Presidential Election: Some Investment Considerations – ZYUS and ZGOL

• The S&P/ASX 200 ended the week down 2.7% – its worst weekly performance since June – after a higher than anticipated CPI reading dampened expectations on any further RBA rate cuts this year. The S&P 500 declined 0.7% and US 10 year Treasury Yields rose by 11 basis points. In Japan the Nikkei 225 rose by 1.5%. BetaShares Global Banks ETF (BNKS) is the best performing long-equity ETF on both a weekly and monthly basis.

The S&P/ASX 200 ended the week slightly lower with resource and financial sector gains offsetting some big declines in healthcare stocks. The S&P 500 added 0.4%, but continued to trade within a tight 2100-2200 range leading into the Presidential election. European and Japanese markets both gained on the expectation of continued central bank stimulus. Gold mining ETFs were the top performers for the week, with MNRS and GDX both adding in excess of 7%.

Key Points:

The S&P/ASX 200 gained 0.6%, whilst Asian markets rallied; the Hang Seng was up 2.4% and the Nikkei 225 was up 2.5% for the week. The S&P 500 lost 0.7% while the EURO STOXX 50 was flat with an improved outlook for financials being offset by further Brexit concerns.

In life, often the simple desire to invest to grow your wealth becomes bogged down in unnecessary complexity. There are many “expert opinions” and lots of terminology and acronyms which all have the potential to create confusion and investor apathy.

• Global equity markets were mixed for the week with the S&P/ASX 200 and the S&P 500 gaining slightly. The EURO STOXX 50 ended the week down by 1% following concerns about the European financial sector. Deutsche Bank, the main target of market speculation, rallied strongly on Friday to finish the week in positive territory. Asian bourses mostly declined for the week.

Global equity markets rallied strongly last week with the S&P/ASX 200 gaining 2.5%, the S&P 500 up 1.2%, the EURO STOXX 50 up 3.3% and Asian bourses also in positive territory. The resources sector was the strongest performer domestically with two resource sector ETFs returning over 5% for the week. Bearish equity funds were the worst performers for the week.

Global equity markets declined last week with the S&P/ASX 200 losing 0.8%, the Nikkei 225 down 2.6% and the EURO STOXX 50 falling 3.9%. The S&P 500 added 0.5% and the NASDAQ 100 gained 2.9%. BetaShares NASDAQ 100 ETF (NDQ) was the best performing ETF for the week, returning 4.1% in Australian dollar terms.

S&P 500 lost 2.39% in a week after comments from Fed officials increased speculation of a rate hike in September FOMC meeting. S&P/ASX 200 and EURO STOXX 50 dropped 0.63% and 0.86% respectively. Nikkei 225 rose slightly, by 0.24%.

EURO STOXX 50 rose 2.30% on the weaker-than-expected US job report. S&P 500 and Nikkei 225 rose 0.5% and 3.45% respectively, S&P/ASX 200 dropped 2.59%.

The S&P/ASX 200, S&P 500 and Nikkei 225 lost 0.20%, 0.68% and 1.12% respectively after the US Federal Reserve officials released comments signalling a high probability of a rate hike in September. However, the EURO STOXX 50 rose 1.4%.

The S&P/ASX 200 and S&P 500 were flat for the week following mixed messages from the FOMC on interest rates and ahead of this week’s Jackson Hole meeting of central bankers. The EURO STOXX 50 declined 2.5% and the Nikkei 225 lost 2.2% after disappointing Japanese growth numbers.

Despite Australia’s strong relationship with gold, the typical Australian investor’s allocation to gold is extremely low compared with European and US equivalents. There are a few reasons why this may be the case, which I’ll explore shortly. However, the reality is that there are good arguments to suggest that every investor should consider at least a small allocation to gold within their portfolio and using an Exchange Traded Fund (ETF) to achieve that allocation is one of the simplest and most cost efficient ways to achieve this.

The S&P/ASX 200 traded within a tight range, rising 0.6% for the week. The EURO STOXX 50 added 2.4%, climbing to its highest level in seven weeks. The Nikkei 225 gained 4.1%, the Hang Seng added 2.8% and Japan and China focused ETFs were the leading equity-focused ETFs for the week.

The week was dominated by central bank action, with the RBA and Bank of England both cutting rates to record lows and speculation of Fed action re-emerging following better than expected US employment numbers on Friday. The S&P/ASX 200 fell 1.2%, the EURO STOXX 50 fell 0.6% and the S&P 500 ended the week slightly higher.

Global equities mostly trended sideways last week, with the S&P/ASX 200 gaining 1.2%, the EURO STOXX 50 adding 0.6% and the S&P 500 ending the week slightly lower. Mining and resource sector ETFs rebounded, with VanEck Vectors Gold Miners ETF (GDX) returning 3.8%, taking its year-to-date total return to 113.1%.

This week’s highlights:

This week’s highlights:

• Global bond yields fell to record lows last week as risk-off trades found favour in the wake of Brexit and ahead of US employment data on Friday.
• The S&P/ASX 200 fell 0.3%, EURO STOXX 50 fell 1.6% and the Nikkei 225 fell 3.7%. The S&P 500 gained 1.3%. Resource sector ETFs were the best performers for the week.
• Precious metals continued to rise, with gold up 1.1% and silver up 2.5% for the week. WTI Crude fell 7.3%, trading below US$45 at times.
• The Australian dollar gained 1% for the week. Japanese yen continued to strengthen, rising 1.9% against the US dollar. Pound sterling continued to decline, losing a further 2.4% against the US dollar.
• The Australian ETF market saw A$28m in inflows and A$84m of outflows for the week. The largest inflows were into high yield equities and bond ETFs. 

This weeks Chart of the week Australian and US governement bond yield (%) over 5 years

This week’s highlights:

This week’s highlights:

This week’s highlights:

Investment in stocks is the mainstay of Australian portfolios. Why wouldn’t it be? Australia is one of the most developed economies in the world. Companies are generally in good health and there are franking credits, one of the greatest gifts to investment returns a government can give to their populace.