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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
State Street Global Advisors, equity markets, Australian equity, global equity, international equity
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Anonymous - Why does this get all the media attention when in reality it affects very few and the charges are minimal? How about reporting on all the ISA TPD.......
Anonymous - This got to be the smartest comment this century ?!....
nan - So what do you do if you are being ripped of and then can't afford the body corporate fees....
MarkL - The banks may not charge dead people any more ........... but they won't charge them any less either!....