SEPTEMBER 2018 QUARTER MARKET OVERVIEW & REPORTING SEASON WRAP
By James Malliaros
We are pleased to provide our Market Overview for the September 2018 quarter and our Reporting Season Wrap.
Returns for the first quarter of the 2018/19 Financial Year were sound. The Australian Equity market was supported by a solid full-year reporting season, while International shares (AUD) were the star performer of the September quarter assisted by the combination of the strong performance in the U.S share market plus a declining Australian Dollar.
Index results for the September 2018 quarter are shown in the table below.
| September Quarter 2018 | |
| Australian Shares (S&P/ASX 200 Accumulation Index) | 1.53% |
| International Shares (MSCI World ex–Aus in AUD) | 7.20% |
| A–REITs (S&P/ASX 200 A–REIT Accumulation Index) | 1.86% |
| S&P/ASX Small Ordinaries Accumulation Index | 1.10% |
Other notable figures at the end of the September 2018 quarter were:
| 30/09/2018 | Quarterly Change | |
| RBA cash rate | 1.50% | Nil |
| 90-day Bank Bill Swap rate | 1.93% | -6.77% |
| 10-year Government Bond rate | 2.667% | 0.06% |
| Gold price | US$1191.50 | -4.78% |
| Oil (WTI) | US$73.25 | -1.22% |
| Iron Ore | US$68.11 | 5.22% |
| Australian dollar | US 72.44c | -2.18% |
While the September Quarter proved to be another strong quarter for investors, at the time of writing, share markets are showing to be a far more challenging for investors during October. Rising interest rates in the U.S, the U.S-China trade war, and lingering worries about possible overvalued U.S. tech stocks are all weighing on the market.
At this stage, we do not see the share market prone to a significant correction or moving into a period of prolonged negative returns. However, we are keeping a close eye mainly on the interest rate environment in the U.S along with the U.S-China trade war as both issues do have the potential to have a significant impact on share market returns. After a prolonged period of strong investments returns, and with these known risks in the system, a slightly more conservative approach in the short term would seem a sensible approach.