November 2024 Insights

It’s the last month of spring, and with summer on the way, many people are preparing for Christmas and the holiday period.

At its latest meeting, the Reserve Bank of Australia (RBA) left interest rates unchanged at 4.35%, citing persistently high underlying inflation of 3.5% for the September quarter, which remains above the RBA’s 2.5% target midpoint. This suggests rates are likely to stay elevated for some time, offering little reprieve for mortgage-holding households. The Consumer Price Index rose just 0.2% in the September quarter and 2.8% over the twelve months to the September 2024 quarter, marking the lowest rate in just over three years. Prices fell slightly for alcohol and tobacco, clothing, housing, health, and financial services. Transport costs also fell for the first time since 2020.

Share prices softened during the last two weeks of October, recording the worst monthly performance in six months. The S&P/ASX 200 closed down by 1.31% for the month, after reaching record highs again mid-month.

The Australian dollar ended the month at 65.7 US cents after almost hitting 70 US cents just a few weeks ago. Investors reacted to weaker-than-expected Australian retail sales and stronger US unemployment and retail sales figures.

Iron ore has hit a one-month low at USD 104.08 after the heady highs in January of almost USD 145. All eyes are on meetings in China this month about expanding its stimulus measures. However, post meeting, the stimulus disappointed investors with many investors believing China is keeping its tactical powder dry in play as the Trump-China tariff negotiations build.

Back over in the US, after a long and hard-fought campaign, the US Election finally concluded. Leading up to polling day, it was expected to be a tight race, but the Don (Donald Trump), managed to pull off a historic White House comeback in emphatic fashion. While the future may hold more uncertainty, shorter term US equity markets rejoiced, with the S&P 500 (+2.53%), Nasdaq (2.95%) and Russell 2000 (small cap representative, +5.84%) all surging post the election result. President elect Trump’s policies of supporting lower corporate tax rates, deregulation and industrial policies that favour domestic growth were all positive for the stock market. Kamala Harris was graceful in defeat and highlighted the “importance of a peaceful transfer of power and being a president for all Americans,” Longer term implications are yet to be felt. Mr. Trump’s policies are more inflationary e.g. imposing very high tariffs (e.g. 60%) on China and maintaining larger budget deficits is likely to have a ripple effect to Australia’s trade. Adding other uncertainties such as climate change policy (e.g. backing fossil fuels) and global trade war with China creates an uncomfortable environment.

If there’s something affecting your financial situation that you’d like to discuss, please don’t hesitate to reach out to our team.