Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892
While geopolitical risks remain high, at the moment, investment sentiment has turned more positive on a potential (if only partial) resolution of the U.S.-China trade disputes. Growth assets have consequently benefited, while the prospect of a pick-up in world growth, and reduced demand for defensive boltholes, have led to sell-offs for bonds and bond proxies. Provided geopolitical risks do not re-emerge to disturb business and investor confidence, the central outlook is for ongoing global growth into 2020, albeit with the balance of risks loaded to the downside.
In Australia, recent data (other than the ongoing recovery in house prices) has generally been disappointing, and even though easier monetary policy is likely to provide some help, corporate Australia will find it hard to boost profits.
The full report can be found here.