Greenwich Wealth Investment Update – May 2019
In this month’s investment update from Greenwich Wealth, we take a look at the economic outlook, the Australian Dollar and how local and global markets are performing.
During the past few weeks, global earnings have been better than expected, but risk assets are struggling as valuations look stretched following the big first quarter rally and political issues surface.
Australia looks to be moving closer to cutting interest rates following a long period on hold. The likelihood of a rate cut by the RBA has been rising over the past few months. The market is currently pricing a 20% chance of a cut at next month’s meeting, 90% by August and are fully pricing in a cut by September this year.
There is no doubt that the Australian economy has weakened over the past couple of years as Chinese growth moderated, hitting exports, whilst property and construction has deteriorated. Speculation has been mounting that a rate cut is due. In April’s RBA meeting minutes, the hurdles for a rate cut were clarified to be inflation and employment. The inflation target of 2% to 3% over the medium-term has been elusive since 2014, and inflation has been weakening since late 2018. If the RBA was only considering inflation, it is likely that they would have cut rates earlier.
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How can Greenwich Wealth help you?
This month’s perspective highlights that market sentiment on all asset classes is constantly changing. It is important for us to quickly recognise any threats, to preserve your investment capital or to identify early investment opportunities to maximise any return advantages.
At Greenwich Wealth we don’t get complacent with the current state of play and constantly monitor investments and your portfolios.
If this article has raised questions regarding your personal situation, please contact one of our team of experts on +61 8 6555 9500.