Euroz Hartleys – Monthly Insights – October 2021
Welcome to the October edition of our Monthly Insights.
In this edition we will:
- provide some observations on the market movements for October,
- release Episode 14 of our short video series 3 Minute Tech where we look at the topic of Succession Planning,
- use our Wealth Point section to dig into The First Home Super Saver Scheme which is aimed at assisting eligible people to purchase their first home,
- introduce our new podcast series “Finding the Front”. This is a podcast series where we take the time out to get to know the story behind the people who “front” some of Western Australia’s leading and emerging companies.
We hope you enjoy.
Market Update as at October
Observations from September…..
With a fall of 1.85% in September, Australian stocks significantly outperformed global stocks (US and China both down around 5%), that spent the month swimming against multiple headwinds.
China was front and centre of the price action with the market exercising caution around cuts to steel production and the financial position of Chinese property company Evergrande and the health of the sector more broadly.
Equity markets also softened into a flagged wind down of US stimulus and an associated rally in bond yields that hammered down valuations of growth stocks in particular, and towards the end of the month, concerns around the US debt ceiling and the impact of a developing shortage of energy was more than enough to wake market bears from their slumber.
Back in Australia, an almost 30% fall in the price of Iron Ore drove significant share price falls in names like Fortescue Metals and Mineral Resources within a sector that was down over 10% for the month.
On the flipside, a rapidly rising vaccination rate and talk of much relaxed travel restrictions as early as November drove a rotation back into COVID affected stocks like Flight Centre and IDP Education that for the month of September were up 30.8% and 18.4% respectively.
Energy was by far the best performing sector as regional markets that had under-invested in production capacity and infrastructure bent under the pressure of rising demand that triggered double digit increases in the price of Natural Gas and Coal. Crude oil was up 7% for the month.
