August was the worst month for global financial markets in several years as sentiment was hit by a conjunction of factors which the markets collectively interpreted as a global deflationary shock. The events included the re-emergence of a decline in the price of oil and other commodities, a surprise currency move coupled with soft economic statistics from China and, finally the ongoing nervousness about when the Federal Reserve will lift interest rates in the USA.
The latter is not new news. What this means is the USA is strengthening, China is weakening and commodities are falling. In the scheme of things there is no economic reason for global market falls but nervousness and irrationality
drives short term behaviour. Portfolios in professional hands are no doubt seeking better value today. Overall equity markets have fallen across the board, especially among the emerging markets, and volatility has spiked sharply higher. The extreme volatility and dramatic reactions to economic news suggest the markets are pricing more off fear than off fundamentals. Economic data from the US released in August confirmed ongoing modest economic recovery with low inflation.
The Australian economy recorded modestly positive real GDP growth in the second quarter driven by consumer spending. The Reserve Bank left the cash rate unchanged at 2% at its Board Meeting on 2 September.
With the ending of the financial year in June in Australia, July proved to be a turbulent month for the world’s financial markets. We witnessed the resolution (for now) of the Greek crisis which settled nerves but no sooner had this happened we experienced significant volatility in the Chinese equity
market which had/has a contagion effect on Australian shares. After flirting with departure from the Eurozone, the Greek Prime Minister suddenly capitulated to the demand of the country’s creditors in a deal that was harsher than he was rejecting a few days before. Greece will now get the financial support it needs, but at a cost as the political landscape has been changed and new elections are likely before the end of the year as voters feel duped by the new government.
The dramatic falls in Chinese equities raised concerns about the country’s economic health, but in reality the stock market has little connection with the economy. Likewise Chinese shares doubled in the corresponding period over the space of a slightly more than a year. Of greater importance is the continued improvement of the US economy and the Federal Reserve’s much publicized signal that it is likely to lift interest rates this year. Markets remain jittery on how this will play out.
Happy New Financial Year! Welcome to Tax Time 2015
Happy 1st July and Welcome to Tax Time 2015. Start the new financial year off on the right foot and get ready to lodge your tax return NOW.
To take away the pain of preparing your documents and make things a little easier we have provided you with our Tax Checklist and any Worksheets.
The Tax Office are now accepting lodgement of 2015 Income Tax Returns , and our team are ready to assist you, so there’s no need to wait until later in the year to get your return lodged.
The Tax Office are processing refunds as quickly as they ever have so once your return is lodged you could have your refund in your account within a couple of weeks. And if you think you may have tax to pay, why not prepare your return early this year so can be cash flow ready when the time comes for payments.
When you have all of your information together you can send it to your accounting manager or firstname.lastname@example.org. Of course, we are always happy to see you so you can also drop your documents in any time or mail them if you prefer.
If you have any questions relating to your tax return for 2015 financial year and tax return preparation, please don’t hesitate to call us 02 9415 1511 or send us an email.
We are all looking forward to working with you again this year.
Christian Borkowski and the PrimeAccounting team.
Are you Compliant? 30 June Deadlines-Act NOW!