Economic and Market Outlook – July 2024
The information in these articles is current as of 1 July 2024.
Welcome to our latest Economic and Market Outlook – July 2024
This edition covers the following topics:
Australian economy
Cost of living pressures and high interest rates continue to affect Australian households, depleting savings and dragging on our economy. Warnings of a recession loom. All eyes are on the RBA, who are focused on reducing inflation at all costs. We investigate if this is the appropriate approach. Learn more about our findings below.
International economy
We retain a cautiously optimistic outlook on the global economy with a gradual economic recovery emerging against the backdrop of falling inflationary pressures and potential political upheaval. There are green shoots evident in Europe and signs that central bank rate cuts may provide a notable tailwind to the global economy as well even as trade tensions are on the rise with new tariffs levied against Chinese electric vehicle competition by both the EU and US. Discover more of our views on the international economy below.
Outlook and sector view for Australian equities
A strong performance from the banking sector drove the Australian share market for the year to 30 June. However, valuation poses a major concern as sectors across the board become more expensive portraying a mixed outlook with the bank majors a key concern on this front. Major exports such as iron ore are being affected by domestic challenges within China, while higher interest rates continue to impact the earnings of both the retail and real estate sectors. Find out more on our outlook below.
Outlook for international equities
Global markets continue to experience a substantial boost due to the anticipated increase in spending on Artificial Intelligence (AI). Technology stocks remain to be the dominant driver of growth as major tech leaders continue to meet to client demand with a material surge in investment spending in data centres, chips and more. With no signs of deceleration in this trend, we remain cautiously positive on global markets notwithstanding higher valuations in the US. For more on our perspectives, please see below.
