Economic Snapshot – November 2015
November was cluttered with mixed messages from mainstream media on global financial markets. Markets appear to have ongoing concern about rising US interest rate increases and weak commodity prices have undermined both bonds and equities through November into early December. An unusually clear message from the Federal Reserve about the likelihood of a rate rise in December and the economy’s ability to handle it sparked a recovery in risk assets in the second half of the month but it then fell away on exactly the same premise. This tells investors to focus on fundamentals not fear. The fundamentals are that the economies of the world are likely to do better over the next few years not worse.
Key economic data in Australia, the US and Europe all suggest scope for modest improvement in economic activity in coming months. However, the manufacturing sector in China continues to slow down as the service sector improves. Again this is nothing new for investment strategists.