Morningstar Australasia Pty Ltd  ABN: 95 090 665 544, AFSL: 240892

The past few weeks have been dominated by geopolitical uncertainty,  particularly  the  prospect  of  a  US-China trade war  and  its  potential  impact  on  global  business  activity:  Equity  markets  have  whipsawed  as trade  tensions  have  risen  or  receded.  The other major development has been further  declines  in  local  and  global  interest  rates  to  even  lower levels. Looking ahead, investment outcomes remain hostage  to  Washington  and  Beijing:  a  deal  could  see  the  long  post-global-financial-crisis world  expansion  carrying  on  into  next  year  or  even  beyond,  but  there  is  a  real  risk  that  ongoing  conflict  triggers  a  cyclical  setback  either  directly  (though  supply  chain  disruptions,  for example) or indirectly   (through   reduced   business   and   consumer   confidence and hence lower capital investment and retail spending).

At   home,   while   income-oriented   buying   has   boosted   equities,   it   is   now   getting   harder   to   find   attractive   investment  options.  Interest  rates  have  dropped  sharply,  and equities are on the expensive side given the subdued outlook for the local business cycle.

The full article can be found here.