subscribe to our newsletter sign up

Equity markets end financial year in tricky position

State Street Global Advisors, equity markets, Australian equity, global equity, international equity

Australian stock markets have steadily ticked upward over the past two years, but State Street Global Advisors says the market may be starting to look stretched.

Since hitting a low point in February 2016, Australian equity prices have “been on an upward march”, despite some parts of the markets suffering bouts of price volatility, the company said.

“Company earnings in aggregate have been improving, but increasing valuation multiples have also driven prices higher,” State Street Global Advisors said.

While this is a positive, the company cautioned that the “local consumer is facing something of a squeeze” given the cost of living has steadily grown as wage growth continues to stall.

“In fact, the Reserve Bank of Australia recently pointed out that the growth in housing credit continues to outpace income growth, and household debt to disposable income continues to reach new highs,” State Street Global Advisors said.

This combination reduces the average household’s available disposable income and puts pressure on some parts of the markets as a result.


Equity markets end financial year in tricky position
nestegg logo
Promoted Content
Recommended by Spike Native Network
TimP - “You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity. What one person receives without working for another.......
Chris - That last line is the best explanation of the Labour Governments approach to managing "our money" that I have ever heard...." Cutting the pie into.......
Anonymous - To complain that the tax cuts will negatively impact on future expenditure on education, where the more that has been spent on education the worse the.......
Ralph - How are they being "paid for it" by younger generations? They paid for it with the taxes they paid from a lifetime of working.....