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Global Markets Review May 2019

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.

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