April 2016 Market Update

/April 2016 Market Update

April 2016 Market Update

Welcome to the latest edition of the Market Update.


The Pulse

• Equity and commodity markets continued to recover off their mid-February lows helped by reasonable economic data, supportive central banks and improved sentiment:
• Oil prices continued to move higher, up another 13% in March
• China economic data was, on balance, a little better
• US economic data continued to improve
• The European Central Bank surprised investors with the size of the additional stimulus measures that it announced in early March to try to combat disinflation
• Australian business conditions outside the mining sector continue to improve
• RBA retains cash rate at 2.0%

Global economies

Global equity markets continued to rise off their mid-February lows helped by a recovery in commodity prices, particularly oil, further monetary policy stimulus from the European Central Bank and commentary from the US Federal Reserve that downplayed the likelihood of further US interest rate rises in 2016.


In the United States, soft Gross Domestic Product (GDP) and Institute for Supply Management (ISM) manufacturing readings in late 2015, which had spooked investors in early 2016, have pleasantly surprised in recent months. GDP growth in the fourth quarter was again revised higher, from an initial reading of 0.7% annualised, to 1.4% annualised.


As expected, the European Central Bank (ECB) introduced additional measures to combat deflation with the main surprise being the larger asset purchase program, up from 60 billion Euro to 80 billion Euro per month.


February data on the export side of the economy was weak with annual industrial production growth of 5.4% the weakest since November 2008 – but part of the slowdown was due to a large decline in tobacco production. Additionally exports contracted by 25.4% in February compared with February last year.

Asia Region

In Japan the second reading on fourth quarter 2015 GDP saw the economy’s estimated performance revised to -1.1% annualised from -1.4% previously, thanks to a stronger than previously estimated uplift in business spending and, less positively, higher inventories.


The Reserve Bank of Australia (RBA) retained the cash rate at 2% at its April meeting. The RBA continues to monitor whether recent improvements in the labour market are continuing.


If you have any questions regarding this report or would like to discuss your portfolio, please contact me directly.


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Any advice in this communication has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on any advice, consider whether it is appropriate to your objectives, financial situation and needs. GWM Adviser Services Limited ABN 96 002 071 749 trading as Garvan Financial Planning, registered office 105 – 153 Miller Street North Sydney NSW 2060, is an Australian Financial Services Licensee and member of the National Australia Bank group of companies.  From time to time Garvan Financial Planning, members of the National Australia Bank group of companies, associated employees or agents may have an interest in or receive pecuniary and non-pecuniary benefits from the financial products and services mentioned herein.

2016-04-18T08:23:25+00:00 April 18th, 2016|Market updates|