Listen to the recording below:
Firstly, the run of March, April and May economic data has been so bad that it can only improve as economies slowly re-open.
Secondly, the added support to consumption offered by government benefits such as Jobkeeper has provided much-needed ballast to a struggling economy and ensured that the economic deterioration wasn’t even worse.
Finally, having seen the positive impact of social distancing, infection ‘curves’ have indeed been flattening in major developed countries such as Australia and in large parts of Europe and the United States.
In a relative sense, the needle has shifted to a positive one, albeit like the sword of Damocles, the threat of a re-escalation in infection rates is looming, particularly in certain parts of the United States.
Equally the true economic pain from shelter-in-place orders has been anaesthetised and it wont be until the end of support programs like Australia’s Jobkeeper (end September) or the Paycheck Protection Program (end July) equivalent in the United States ends that the full toll is revealed.
Hence, investment markets sit in an eerie twilight, hopeful but with significant hurdles ahead.
For those of you interested to track the progressive re-opening of cities, I would direct you to the following websites:
Construction activity set to soften considerably
Search for Yield amongst the ASX200
The chart below shows the forward forecast dividend yield for the ASX200 and how it compares to history
Monday 25th – Friday 29th May 2020
A very quiet week with US public holiday Monday restricting activity.
Index | Change | % | |
All Ordinaries | 5608 | +116 | +2.0% |
S&P / ASX 200 | 5497 | +92 | +1.6% |
Property Trust Index | 1174 | +49 | +4.5% |
Utilities Index | 7474 | -179 | -2.4% |
Financials Index | 4131 | -27 | -0.7% |
Materials Index | 12772 | +735 | +6.1% |
Index | Change | % | |
U.S. S&P 500 | 2855 | -8 | -0.3% |
London’s FTSE | 5993 | +193 | +3.3% |
Japan’s Nikkei | 20388 | +351 | +1.7% |
Hang Seng | 22930 | -867 | -3.7% |
China’s Shanghai | 2814 | – | – |
Monday 25th – Friday 29th May 2020
The information in this recording and article contains general advice and is provided by Primestock Securities Ltd AFSL 239180. That advice has been prepared without taking your personal objectives, financial situation or needs into account. Before acting on this general advice, you should consider the appropriateness of it having regard to your personal objectives, financial situation and needs. You should obtain and read the Product Disclosure Statement (PDS) before making any decision to acquire any financial product referred to in this recording and article. Please refer to the FSG (www.primefinancial.com.au/fsg) for contact information and information about remuneration and associations with product issuers. This information should not be relied upon as a substitute for professional advice, and we encourage you to seek specific advice from your professional adviser before making a decision on the matters discussed in this recording and article. Information in this recording and article is current at the date of this recording and article, and we have no obligation to update or revise it as a result of any change in events, circumstances or conditions upon which it is based.