Asset Allocation Strategy
Australian Equities: Underappreciated in a Global Context
Mon 9th November, 2020

The backdrop for the Australian equity market is getting incrementally more positive as the market attempts to break out of its range trading pattern of the past 5 months. We upgraded Australia to overweight versus global equities in mid-October, and support for the local market looks to have built over the past few weeks. 

In the past month we have seen:

  • A very supportive Federal Budget (11% of GDP in support)
  • Further monetary stimulus from the RBA, including a move to a full-scale quantitative easing (QE) program
  • Improving local COVID-19 containment trends (Victoria) at the same time as US and European infection rates have accelerated
  • AGM season is showing some rays of light in terms of better than feared earnings performance

      In this week’s macroeconomic view we delve into:

      • The factors driving growing support for the local market
      • The fiscal and monetary policy in place for “extended” economic support
      • The attraction to Australia as a lower risk reopening play

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          Written by

          David Cassidy , Head of Investment Strategy

          David is one of Australia’s leading investment strategists.

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