Greetings from the entire team at Austen Morris Associates. Although our offices will be closed between Monday 30th September 2013 and Monday 7th October 2013 to observe the China National Holiday, we’ll still continue to follow the markets. Our Johannesburg, South Africa offices however remain operational during this time. For any of our China readers traveling during this break, we wish you safe and enjoyable travels and do stay tuned for the next Money Matters for a recap. But first, let’s take a look at the last week of September’s market activity.
The last week of September was relatively quiet as most of the market movements were marginal. It seems that investors around the world are continuing to digest the latest FED announcement to keep stimulus running, and with the US reaching their budget ceiling (which is expected to breach in the middle of October), a few more investors seem to be taking to the sidelines to spectate with trading volume slightly less than average. This isn’t the first time the US has had to deal with budget issues and if the previous occurrence in 2011 is any indicator, then some kind of resolution will be applied. It may however be a last minute resolution and temporary fix only, but something will be done because if not, the US government would default on its debt for the first time in history!
With that said, these concerns barely weighed on markets, with most global indices down around 1% on average for the week. Once this issue has passed we expect some continuation of what we saw in September, in that emerging markets look to recover some ground from their lows earlier this year, as both China and Brazil have started to pick up in the recent months. China has had three consecutive months of better than expected data in manufacturing and trade numbers which could help set a foundation as the traction starts to take hold. However, there’s still some hesitation, but this helps supports an upward trend based on the recent figures.
Looking back at the month of September on the whole, emerging markets were some of the better performers, especially in the South East Asia region, followed by energy and commodities, as well as developed equities which continue to lead on the year. Gold was one of the few assets that had a negative month and although gold continues to trade away from fundamentals it does indicate a good long term hedge and it is recommended investors ride through the volatility. Most importantly be sure to keep a balanced and diversified position as we head into the final quarter of the year.
For Austen Morris Associates’ investors – talk with your advisor about any repositioning to take advantage of markets at this time. For more information about Austen Morris Associates please visit our website.
Darren Cox
Co-Head of Portfolio Management
Austen Morris Associates Wealth Management & Investment Team
www.austenmorris.com
