Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892
World equity and bond markets fell in recent weeks, and although equities have recovered somewhat since, the episode is a reminder that expensive equity, bond, and bond-proxy prices are at risk from the end of ultra-low cash and bond yields. On a brighter note, the world economy has been strengthening and the improved cyclical outlook will assist growth-oriented assets.
In Australia, the current business expansion looks to be picking up, but it remains to be seen whether the pickup will be strong enough to reverse the recent underperformance of local equities.
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