Invest
Surprise market reversal leaves investors ‘flatfooted’
After a blockbuster year of surprise market developments, an investment manager has highlighted the equity flip that caught investors by surprise.
Surprise market reversal leaves investors ‘flatfooted’
After a blockbuster year of surprise market developments, an investment manager has highlighted the equity flip that caught investors by surprise.
Speaking to investors at a webinar yesterday, State Street Global Advisers (SSGA) flagged a distinctive mid-year shift in equity markets.
“Up until June 30, the defensive sectors and the bond proxy sectors, like utilities, and real estate were outperforming. However, since June 30, we've seen a rotation into more cyclical areas of the market, the materials sector, energy and financials, for example,” SSGA head of ETF strategy Matthew Arnold said.
“It's been a pretty dramatic rotation and I’m sure that caught investors flatfooted.”
As the chart below demonstrates, the last six months of 2016 saw almost a complete reversal in equity markets, with health care, real estate and utilities suffering the biggest turnarounds.
“We started to see the shift around July 8 or 9 where we had a low on the 10-year US Treasury and since that time, rates have been backing up globally and there’s been a hand-off to the more cyclical sectors and the equity market with the more defensive sectors underperforming,” Mr Arnold said.
He said what accentuated these trends was Donald Trump’s surprise US election victory, which buoyed the Australian commodity sector.
“The Trump election really turbo-boosted that. One of his commitments to spend $1 trillion on infrastructure is going to be good for materials and commodities so Australian materials and commodity-related companies have rallied aggressively since [his election],” Mr Arnold said.
Looking ahead, he said the effect of president Trump’s policies in 2017 would have a sizeable impact on the Australian equity market.
“This growth story or reflation story in the US will have a significant impact on Australia. If you look at the top Australian resources companies, these guys are global so what happens in the US will certainly impact them.”
RELATED ARTICLES
Stock market
6K Additive secures A$48 million through initial public offering on the Australian Stock Exchange
6K Additive, a prominent player in the advanced metal powders and alloy additions market, has made a significant stride by successfully completing its Initial Public Offering (IPO) on the Australian ...Read more
Stock market
Institutional investors increase stock allocations to 18-year high amid cautious market shifts
In a recent development, State Street Markets unveiled the findings of its latest State Street Institutional Investor Indicators, revealing intriguing shifts in institutional investor behaviourRead more
Stock market
FOREX.com launches in Australia to empower self-directed traders
StoneX Group Inc. (NASDAQ: SNEX) has announced the Australian launch of FOREX.com, expanding access for self-directed traders to a global suite of Contracts for Difference (CFD) products across ...Read more
Stock market
Westpac and CMC Markets strengthen partnership to enhance online trading services
In a significant move that underscores the evolving landscape of online trading in Australia, CMC Markets Stockbroking has been chosen as the preferred vendor by Westpac Banking Corporation to extend ...Read more
Stock market
Portfolio reviews as an operating discipline: turning volatility into a competitive edge
In a higher-rate, higher-volatility world, portfolio reviews are no longer an annual hygiene task; they’re a core operating rhythm that protects cash flow, unlocks tax alpha, and sharpens risk ...Read more
Stock market
Fee war on the ASX: Global X’s A300 turns up the heat on core Aussie equity ETFs
Global X has lobbed a 0.04% management fee into Australia’s core equity sandbox, launching the Australia 300 ETF (A300) to take on entrenched giants. Read more
Stock market
Challenger IM shakes up the ASX with private credit note and a side of risk
Challenger Investment Management has taken private credit mainstream with an ASX-listed note structure—LiFTs—that secured roughly $100 million in cornerstone commitments within a day of launch. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
Stock market
6K Additive secures A$48 million through initial public offering on the Australian Stock Exchange
6K Additive, a prominent player in the advanced metal powders and alloy additions market, has made a significant stride by successfully completing its Initial Public Offering (IPO) on the Australian ...Read more
Stock market
Institutional investors increase stock allocations to 18-year high amid cautious market shifts
In a recent development, State Street Markets unveiled the findings of its latest State Street Institutional Investor Indicators, revealing intriguing shifts in institutional investor behaviourRead more
Stock market
FOREX.com launches in Australia to empower self-directed traders
StoneX Group Inc. (NASDAQ: SNEX) has announced the Australian launch of FOREX.com, expanding access for self-directed traders to a global suite of Contracts for Difference (CFD) products across ...Read more
Stock market
Westpac and CMC Markets strengthen partnership to enhance online trading services
In a significant move that underscores the evolving landscape of online trading in Australia, CMC Markets Stockbroking has been chosen as the preferred vendor by Westpac Banking Corporation to extend ...Read more
Stock market
Portfolio reviews as an operating discipline: turning volatility into a competitive edge
In a higher-rate, higher-volatility world, portfolio reviews are no longer an annual hygiene task; they’re a core operating rhythm that protects cash flow, unlocks tax alpha, and sharpens risk ...Read more
Stock market
Fee war on the ASX: Global X’s A300 turns up the heat on core Aussie equity ETFs
Global X has lobbed a 0.04% management fee into Australia’s core equity sandbox, launching the Australia 300 ETF (A300) to take on entrenched giants. Read more
Stock market
Challenger IM shakes up the ASX with private credit note and a side of risk
Challenger Investment Management has taken private credit mainstream with an ASX-listed note structure—LiFTs—that secured roughly $100 million in cornerstone commitments within a day of launch. Read more
Stock market
International stocks: Diversifying your portfolio beyond Australia
In an increasingly globalized market, Australian investors have the opportunity to enhance their investment portfolio by incorporating international stocks. Diversifying your investments globally can ...Read more
