The upward trend continued for the Australian sharemarket during May.
The All Ordinaries Index closed the month 1.8% higher at 3,813.3 points. The market was up more than 4.5%, before retracing during the second half of the month.
Global shares continued with its recent rally. The Dow Jones Industrial Average recorded it biggest three-month gain since November 1998.
May was a big month of economic news. The Federal Government released the Budget on the 12th of May. Despite the much publicised Budget deficit, the sharemarket had no significant reaction. Market watchers have been more focussed on the United States and the near-certain bankruptcy of General Motors, and US unemployment results to be announced this week.Swine flu still exists as a potential major risk factor for global markets. Although, the scale of the disease appears more manageable than first feared.
The All Ordinaries Index remains in positive territory for the year, up 4.2% year-to-date.
The RBA board meeting is tomorrow, with economists expecting interest rates to remain on hold. Other economic data to be released this week is the March quarter GDP results. Most are expecting the results to confirm a further contraction in the economy.
We continue with our positive bias toward the Australian sharemarket. Whilst we expect to see continued price volatility for the remainder of the year, we feel share prices have already discounted the major risks associated with the global economy.