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News and Insights

Aura Global Insights – Issue No. 28

 

PEACHGATE in WASHINGTON

Continuing low US inflation and widespread interest rate easing by central banks around the globe may add to a positive yet limited scenario running into year end. Whilst never a dull moment in the US Capital, Congress House Speaker Nancy Pelosi announced a formal impeachment inquiry against President Trump accusing him of unlawfully urging the Ukrainian president to investigate former vice-president Joe Biden. An impeachment would require a 2/3rds majority vote in the Senate where Republicans maintain control, making the chance of a conviction unlikely.

As a result, there may be swings in the global investment markets due to the political headlines. However, the markets are likely to be driven by the behaviour of the U.S. consumer, US-Sino trade developments in the near term. In general, defensive sectors continue to be heavily supported by investors with the utilities, consumer staples and REITs being strongly bid. Moreover, information technology and the financial sectors are also finding favour.

Volatility in the investment markets is likely to remain elevated considering October’s history of being one of the most volatile months of the year. The technical indicators are mixed, suggesting the consolidation phase. However, stockmarket breadth, that had shown signs of improvement, has stalled over the past few days with small / mid cap equities and US transportation which had shown signs of improving trends falling back to levels last seen in August and early September.

The bottom line: With Washington looking more like Hollywood, negative divergences and a wide swinging trading range which have handicapped investment market since May, are likely to remain an anchor on overall investment market performance, running in to the back end of 2019. Trump for an Oscar?

Andrew Coloretti

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This is communication is provided for informational purposes only by Aura Wealth Pty Ltd (AFSL 380552) and is of a general nature only. Accordingly the information provided does not take into account your investment objective, financial situation or needs. You should seek professional advice before making any investment decisions and consider whether the information is appropriate in light of your objectives, financial situation and needs.  The views and opinions expressed in this material are those of the author as of the date indicated and any such views are subject to change at any time based upon market or other conditions. The update may contain certain statements deemed to be forward-looking statements, including statements that address results or developments that Aura expects or anticipates may occur in the future. Any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Past performance is not a reliable indicator of future performance.