Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892
Many asset classes have done well for the year to date. Equities have continued to recover from their sell-off late last year; income-oriented asset classes like property (local and global) and infrastructure have been in strong demand; and bonds are also ahead for the year as bond yields have fallen. Looking ahead, the most likely scenario is that the world economy will “muddle through” with ongoing economic growth, though the likely pace of business activity now looks slower than previously expected. Cash and bond yields will remain low and could even fall further. Risks and uncertainty remain high, however, particularly around threats to world trade.
In Australia, too, the likely immediate economic outlook is for slower growth than previously, with sharply lower house prices affecting an already cautious household sector. The big issue for businesses will be how to grow profits in a slower-growing economy.
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