Last week, I predicted that there would be a slight decrease in the Australian Stock Exchange index as market pessimism continued to grow in the wake of global trade conflict. Interestingly, strong performance from Financial, Material, and Healthcare stocks offset any bearish behaviour in other sectors. At the week’s conclusion, the ASX 200 had risen from roughly 6650 to a touch below 6750. Notably, the ASX 200 index is now increasing at a decreasing rate, indicative of a slow-down in investment momentum.
Another forecast made was that the blame game of infrastructure spending would re-commence in Australian politics. The politicians did not disappoint. Labor’s urban infrastructure spokesperson Andrew Giles criticised that the Liberal Government’s MP for Cities, Urban Infrastructure and Population, Ian Tudge, had spent more than $11m on advertising for infrastructure spending without utilising any of the $40m allocated to construction. Mr Tudge insists that infrastructure expansion will commence closer to Christmas in an attempt to allay fears that the Morrison Government is taking a dangerously hands-off approach with the economy in a time when fiscal stimulus is sorely needed.
The Week Ahead
Mining stocks will continue to perform strongly in the wake of Scott Morrison’s latest meeting with President Trump. Mr Morrison claims that Australia is in ‘good shape’ concerning its export opportunities following the meeting with Trump. With the USD’s recent appreciation and the Yuan’s consistency against the AUD, Australia is still positioned favourably on a currency-basis for continued success in mineral and resource exports.