Market Summary | November 2019
MARKET OVERVIEW
In line with many of the market summaries this year, movements in markets for November were largely inspired by combat associated with the ongoing trade dispute between the US and China.
It has been a few months in waiting but November did bring back a resurgence in my favourite genre of Trump tweets, which only occur when markets reach all time highs. We saw this a number of times throughout the month as markets ventured into uncharted territory.
UNITED STATES
November saw US indices continue their strong run following easing tensions in the trade war with China. Gains were largely led by the Information Technology Sector (+5.2%) which was powered along by strong results from Apple. There has been strong demand for the newly released Air Pods Pro with Apple reportedly trying to double production of the new product. The outlook for Apple remains bright with the 5G upgrade cycle expected to begin in 2020.
We also have to appreciate the marketing masterpiece which was the Telsa Cybertruck, which was unveiled by Tesla CEO Elon Musk in late November. Despite the car’s windows shattering on stage and the car being widely mocked globally, the distinctly angular pick-up truck amassed around 150,000 pre-orders without any marketing budget.
The S&P 500 Index (USD) returned 6.77%
The Dow Jones (USD) returned 5.46%
ASIA
The Hong Kong index has suffered throughout 2019 returning -0.60% in the 12 months to November, lagging behind its Asian counterparts. The index has largely been held back by the ongoing pro-democracy disputes but may represent a good value play once the protests resolve and the economy picks up again.
Despite the craziness in Hong Kong, consumer powerhouse Alibaba proceeded to dual list their shares on the local exchange which completed the largest stock offering this year. Alibaba was also in the press earlier in November when they reportedly took home $55bn in 24 hours of trading for singles day, a Chinese shopping holiday that originated as an unofficial holiday for bachelors.
The Hong Kong Hang Seng PR Index (HKD) fell 2.08%
The Nikkei 225 PR Index (JPY) returned 1.60%
The Shanghai Shenzhen CSI 300 PR Index (RMB) fell 1.49%
EUROPE
Germany yet again managed to narrowly avoid entering a technical recession when it posted growth of 0.1% for the third quarter. The second quarters growth figure was revised downwards to minus 0.2% ultimately meaning the economy has not grown for the last 6 months.
The Brits prepared to go to the polls throughout November with Boris Johnson going in as comfortable favourite. As a result, the pound has been strengthening against the Australian Dollar in the weeks leading up to the election as it appears as if Brexit is becoming more and more of a certainty.
The UK’s FTSE 100 PR Index (GBP) returned 1.35%
The German Dax (EUR) returned 2.87%
AUSTRALIA
The RBA left rates on hold at a record low of 0.75% at Novembers meeting with little guidance towards a further cut in December. It seems the RBA is pleased with the response of the housing sector to the rate cuts, although the cuts are yet to provide any assistance in other sectors of the economy.
Australia’s GDP growth for the September quarter came in at a less than impressive 0.4%. The result reflects weak consumer spending as cuts to both interest rates and taxes have failed to get people spending.
The ASX 200 Accumulation Index returned 3.28% in November. November’s gains were driven by strength in Health Care (+8.9% and +51.7% over 1 year), while Materials (+4.7% and +31.9% over 1 year) continues to support the index. Financials continued to struggle as Westpac (-13.1%) was the latest to be hit with negative headlines.
Caltex (+26.76%) took the reigns as one of the indexes top performers for November when they received a takeover offer from Canadian convenience store operator Alimentation Couche-Tard.
MARKET RETURNS (LAST 12 MONTHS)
Recent performance has pushed the return of Australian equities ahead of International equities. Performance from equities remains in positive territory whilst returns from cash remain somewhat suppressed.
The above graph summarises the performance of the major financial markets and gives you an indication of how these markets performed over the last 12 months. The graph does not reflect your actual portfolio performance.