Good day to everyone! November’s just started, and things are looking to be busy in many ways! Not only are we in the lead up to Christmas, but the month will also see a few other noteworthy events taking place. The Melbourne Cup will be sharing its limelight Down Under with the US Elections this week (Tuesday), China has some political and leadership changes taking place during the month, while Austen Morris Associate’s 2nd Annual Chi Fan for Charity (www.chifanforcharity.org/shanghai/) is taking place on Saturday 17th November from 7:30pm across more than 50 restaurants in Shanghai raising funds for three worthy charities. Thanksgiving will round out the month and I rounded out our softball season with my team mates battling to take 3rd place out of 14 in the tournament. Not such a bad effort overall but the team and I definitely have some things to work on for next season. With that said, let’s take a look at the markets….
It was a positive week in most markets as data throughout the week helped push concerns out the door. I mentioned two weeks ago that we’d likely be seeing a tug of war match between QE3 and economic data and we certainly haven’t been disappointed with this having coming to fruition as expected and we are now seeing the effects of QE3 trickle into the market. Remember it hasn’t been that long since September when the US FED announced their $40 billion a month stimulus package that will continue until they change their mind. How convenient!
But whether it’s really QE3 that’s helping the US data or whether it’s the US Presidential election that’s set for this week, US data has been helping to Election Seasonimprove the markets and it will be exciting to see if they can keep driving those numbers into better territories. The support this provides will certainly help other regions of the globe and in addition to the US, probably very soon we’ll be looking to China to also start having a positive impact on global numbers. After almost a year of weak manufacturing data in China, the numbers have now broken through the confidence barrier of 50 and returned into positive levels (i.e. above 50 is considered to be in growth territory while falling below 50 is referred to as ‘contraction’). With China’s leadership change happening in November as well, and much like we’re seeing now in the US, almost everyone likes making situations seem a little better during times of political change. We’re not saying that this is going to be easy, or that we’ll start seeing fantastic numbers in the markets immediately, but it might buy enough time and confidence to start allowing other areas around the globe to recover and start a sustainable growth trend!
Gold Investments
Regardless, it always comes back to investing on fundamentals and although it feels like fundamentals have been pushed to the back they will return at some point and it’s important that we don’t lose sight of them when markets are volatile – because we’ve surely seen some volatile times of late! Despite this, we have seen some sectors and regions perform incredibly well over the past few years, and certainly there are some areas such as emerging market bonds that have started to really perform in recent months. Crude oil remains down but is seen as a good opportunity to continue hold or acquire at this time. Gold has climbed a bit and looks positioned to continue to its previous highs in the coming months. US equities might be some of the best performers of late and that doesn’t look to be slowing down this week. Once again, it’s important to hold a balanced portfolio to remain flexible for any rebalancing when the opportunities arise, while sticking to your longer term strategies will help decisions and achieve targets in time.
For Austen Morris Associates’ investors – remember to hold a balanced portfolio and talk with your advisor about any repositioning to take advantage of markets at this time. For more updates on the world financial news please visit our Weekly Global Economic Outlook.
Hope you have a great week.
Co-Head of Portfolio Management,
Darren Cox
Austen Morris Associates Wealth Management & Investment Team
www.austenmorris.com
