Australian economy, Global economy, news, Equity, Alternative Assets, Fixed Income, SMSF
The Australian federal election dominated markets in May, with news polls and pundits favouring a change of government right up until election eve.
Sportsbet were so certain of a Shorten Labor Government win that it paid out Labor punters 2 days ahead of the election on ‘Winx like’ odds of $1.16. Conversely, the Coalition was (at one point) on $7.50. Sportbet failed to close the Coalition book, and ended up paying the brave bets, while in the process losing a total of $5.2m (both ways).
Post the election, short positions were covered and the Australian banks had a solid 8.5% gain. Iron ore continued to rally to around $100 on supply constraints, helping FMG, RIO, and BHP. Aussie stocks posted a positive return for the month, outperforming global peers.
The US included the Chinese telecom equiprment manufacturer Huawei in its trade spat by banning Federal agencies from buying from it. Google then pulled Huawei’s Android license (the operating system/app store), making the equipment maker’s phones next to redundant in a market that has 74% of the global operating systems.
Bond yields went to new lows on global growth concerns and risk aversion, allowing a solid return for the month.