It certainly has been a devastating and tragic January with severe flooding across the country. The Australian share market has understandably underperformed in comparison to the US for the month.
The All Ordinaries Index gained a meagre 0.1% to close January at 4,850.0 points. Global markets were mixed for the month with the Dow Jones Index gaining 2.7%, the FTSE falling 0.1%, the Hang Seng gaining 1.8% and the Nikkei 225 Index gaining 0.1%.
US shares recorded the best performing January in years. The US economy and, by note of earnings reports, US companies are seemingly firing along. The second round of fiscal stimulus (referred to as QE2) appears to be working.
Recent attention has turned to the trouble in Egypt where protest organisers were calling for a million people to march on Tuesday to demand the ouster of President Hosni Mubarak.
It’s too early to call what the impact of the demonstrations in Egypt will be, however the one thing that is clear is that the cost of oil has risen sharply – which will inevitably mean higher petrol prices.
Ironically it was at this exact time last year when the Greece sovereign debt concerns emerged. But last New Year’s crisis was all about debt while this one is all about oil. We will have to watch the coming days with close interest – however I retain my positive outlook for the Australian share market in 2011.
The Australian Dollar remains strong and is currently buying US99.58 cents to the dollar.
The Reserve Bank board meets today to assess interest rates, with expectations of the cash rate to remain on hold at 4.75% per annum.
For more information please contact Ryan Love on 1300 856 338 or e-mail ryan.love@apexpartners.com.au.
This article is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.