Happy new year! The Ipswich office are now all back on deck and looking forward to helping our clients reach their financial goals in 2020. In the face of the widespread bushfires it’s been a turbulent start to the year already. While we don’t have a crystal ball, we’ve put together a brief summary on where things currently stand and what may impact markets in 2020.
Trump will continue to move markets
While China & the US have come to an initial trade agreement earlier this month, with a US election looming expect anything but easing off from Donald Trump – who has every incentive to make people feel richer in the lead up to the election. We’ll also continue to see him (or rather his twitter handle) dominate the headlines – which could have an impact on markets globally. In fact, according to a survey conducted late last year, 80% of stock market traders confirmed their decisions were influenced by Trump’s tweets!
Longevity in low interest rates – more cuts to come
Official rates are already at a record low 0.75% and we can likely expect them to be cut even further to 0.5% when the RBA board meets again on 4 February. This is in part due to the bushfires, but also a reflection on low growth to date keeping underemployment high, wages growth weak and inflation lower for longer.
Bushfires drag on economy
Having destroyed near 9M hectares of land across the country, the bushfires over 2019/2020 are likely to have broader macroeconomic impacts beyond the devastation experienced by local communities.
From food prices increasing following damage to fresh produce supplies, the significant hit Australian tourism is likely to take off the back of the blaze, to the reduced work productivity in the face of hazardous air pollution affecting over 30% of the population, the indirect damage to the economy will be significant.
While government spending on the recovery effort may assist, it may come down to consumers increasing spending directly in communities impacted by the fires to help stimulate the local and broader economy.
Markets will remain positive, however continue to expect volatility
We may finally start to see the effects of the easier monetary policy that occurred through 2019 begin to fuel expansion in global economic growth, though it will be slow – economists tip global economic growth to increase from 3% in 2019 up to 3.2% in 2020.
This growth will be influenced by ongoing volatility in the face of international politics including Trump’s impeachment trial and the conflict between the US and Iran, as well as housing price affordability and tight lending standards here at home.
However, experts are confident that while Australian growth is weak, a recession remains unlikely thanks to strong spending on infrastructure, increased investment in mining, expected fiscal stimulus following the fires, and a weaker Australian dollar.
Where to put your focus in 2020
While this is a brief look at what we can expect over the year ahead, the fundamental facts of sound financial management remain the same: block out the noise, stay focused on the long term, diversify, and seek advice!
If you’re wondering how any of these issues, or other headlines you’ve seen, could affect you and your financial decisions over the year ahead, feel free to reach out to us anytime for a no obligation discussion on your personal situation. You can contact us here.
News from the team
We all made the most of the festive season and a few weeks off – here are a few happy snaps of what our team got up to over the break. If these pictures have you wanting to plan your next holiday stay tuned – we’ll be sharing top holiday tips & destinations from our clients in an upcoming blog!
Clockwise from left:
- David and Ryan were at the south coast with family
- David also enjoyed a day at the Brisbane International Tennis – watching Ipswich local Ash Barty with wife and daughter
- Paul visited a farm stay with his family
- Katrina and Nat visited Australia Zoo with the kids and also had a comical encounter with Santa (daughter Zoe not so impressed!)
Not pictured is Sharyn who was working hard right through (someone had to!), and the rest of the team enjoyed a well-earned break. If you’re popping by the office soon we’d love to hear about your holidays too!