Invest
The week ahead across the markets
Julia Lee, equities strategist at Bell Direct, takes us through the major events that impacted the market last week and what to look out for in the week ahead.

The week ahead across the markets
Julia Lee, equities strategist at Bell Direct, takes us through the major events that impacted the market last week and what to look out for in the week ahead.

A look at the week gone by
I think the market is still very much focused in on whether growth is rolling over, that means the two things in focus were US/China trade relations and what was happening in terms of the bond markets.
In terms of the US/China relations, they seem to have improved somewhat this week. That was shown by movements in automobile concessions from China towards US automakers, and also China placing its first order of US soybeans, which will be delivered in the first quarter of 2019.So, that was a relatively positive move for markets this week.
But, in terms of market performance, it really does look like we’re clocking up the fourth consecutive month of declines. Much of it is going to hinge on the last two weeks of the year, which do tend to be pretty quiet.
But given that next week is the all-important FOMC meeting on interest rates over in the US, I think that’s going the key on whether markets will rally into the year end and we see a positive performance for the month of December or a negative one.
I think Theresa May winning the confidence vote in the UK was a mild positive for markets, also. It had a larger impact in terms of currencies, but if we had seen a no confidence vote go through, that would have been another distraction. Fortunately, that did not turn out to be the case.
What to look out for next week
There are a few things on the domestic calendar.
First of all, this week we heard from Westpac, the first out of the three of the big four banks to have their AGM this month. This was the first AGM for three of the majors since the Royal Commission, and we did see that first renumeration strike. So, Wednesday is going to be important, when we see both ANZ and NAB’s annual general meetings. That will be a key focus, especially given the softness in terms of the housing market and the remediation that is occurring because of what’s come out during the Royal Commission.
We will also be watching a few other AGM’s about town. Orica is on Wednesday and DuluxGroup and Incitec Pivot are on Thursday.
We’ll also get traffic numbers coming through from Sydney airport and Auckland airport next week for the month of November. That’s going to be interesting, given that we have seen a slowdown in arrivals coming from offshore, especially from China – which has slowed to about one per cent.
So, just watching to see whether those weaker trends do continue and the implications for some of those stocks that are exposed to tourism.
But, of course, the major event is going to be the FOMC event on interest rates over in the US on the 19th of December. Markets have pretty much priced in a rate hike.
The important thing there is going to be the dot plots for 2019 in particular, and whether we do see less rate hikes being expected for 2019. At the moment, the dot plots are at three rate hikes for 2019, but if we see that being wound back that could help to support a ‘Santa rally’ into the year end.
Expected outlook for the Australian market
Next week really kicks off school holidays, so this is when we start to get into the holiday volumes. But given the big event with the FOMC meeting, it could be quite a volatile one. The combination of the very important macro-event coming through combined with the lower volumes can usually mean larger movements in the markets.
But there’s a number of dividend payments hitting bank accounts as well, and that usually means some of that will find its way back into the Australian share market.
Really, we’re looking at a winddown into Christmas, especially post that FOMC meeting and lighter volumes coming through, as most of the market goes on holidays over the next couple of weeks.

Investment insights
Why ethical investing is at a tipping point
Best-selling author Malcolm Gladwell said it best: “Look at the world around you. It may seem like an immovable, implacable place. It is not. With the slightest push – in just the right place – ...Read more

Investment insights
Ares withdraws from AMP bid as wealth manager’s financial results spell trouble
The bad news keeps rolling in for AMP, with the wealth manager reporting a significant drop in profit as its US bidder, Ares Management Corp, announces that it is backing out. ...Read more

Investment insights
‘RBA not responsible for asset prices’, governor says
RBA governor Philip Lowe has said that the Reserve Bank is not responsible for targeting asset prices, after questions were raised about the creation of raging bull markets against the backdrop of l...Read more

Investment insights
Retailers report strong HY21, with Super Retail set to refund JobKeeper
Certain Australian retailers are flourishing despite the government-mandated temporary store closures in 2020, with JB Hi-Fi reporting good sales growth and Super Retail Group pledging to hand back $1...Read more

Investment insights
Yes, working from home is risky. Here’s how to counter that
Before COVID, 26 million Americans worked from home part-time or full-time, and now that number has tripled. ...Read more

Investment insights
ESG is becoming popular but ‘greenwashing’ is a problem
Sustainable investing is back on the radar as a result of the COVID-19 pandemic, but experts warn that better standards around ESG products are needed to mitigate “greenwashing”. ...Read more

Investment insights
Federal Court case lodged to stop Qantas from outsourcing 2,000 jobs
Qantas is being dragged to court over its decision to outsource 2,000 jobs across 10 airports in Australia as part of a company-wide restructure. ...Read more

Investment insights
Where should you invest when interest rates are so low?
With the cash rate close to zero, this will have big implications for how you should invest your money to generate the best return. So, what are the options and which asset classes will best enable yo...Read more

Investment insights
Why ethical investing is at a tipping point
Best-selling author Malcolm Gladwell said it best: “Look at the world around you. It may seem like an immovable, implacable place. It is not. With the slightest push – in just the right place – ...Read more

Investment insights
Ares withdraws from AMP bid as wealth manager’s financial results spell trouble
The bad news keeps rolling in for AMP, with the wealth manager reporting a significant drop in profit as its US bidder, Ares Management Corp, announces that it is backing out. ...Read more

Investment insights
‘RBA not responsible for asset prices’, governor says
RBA governor Philip Lowe has said that the Reserve Bank is not responsible for targeting asset prices, after questions were raised about the creation of raging bull markets against the backdrop of l...Read more

Investment insights
Retailers report strong HY21, with Super Retail set to refund JobKeeper
Certain Australian retailers are flourishing despite the government-mandated temporary store closures in 2020, with JB Hi-Fi reporting good sales growth and Super Retail Group pledging to hand back $1...Read more

Investment insights
Yes, working from home is risky. Here’s how to counter that
Before COVID, 26 million Americans worked from home part-time or full-time, and now that number has tripled. ...Read more

Investment insights
ESG is becoming popular but ‘greenwashing’ is a problem
Sustainable investing is back on the radar as a result of the COVID-19 pandemic, but experts warn that better standards around ESG products are needed to mitigate “greenwashing”. ...Read more

Investment insights
Federal Court case lodged to stop Qantas from outsourcing 2,000 jobs
Qantas is being dragged to court over its decision to outsource 2,000 jobs across 10 airports in Australia as part of a company-wide restructure. ...Read more

Investment insights
Where should you invest when interest rates are so low?
With the cash rate close to zero, this will have big implications for how you should invest your money to generate the best return. So, what are the options and which asset classes will best enable yo...Read more