Kochie’s Market Update: 2019 in a nutshell

- January 24, 2020 2 MIN READ

Hey gang, get up to speed on this week’s financial trends with my market updates.

Even though we may still be in holiday mode, so much has been happening.

– This week’s good job figures…29,000 new jobs created for the month of December and the unemployment rate falling to 5.1 per cent has many economists putting back their forecast of the next official interest cut.

For example, Westpac’s economics guru Bill Evans was expecting a cut as soon as next month but now says it will more likely be April.

– The Australian sharemarket has had its best start to a year in 26 years. Up over 6 per cent in the first few weeks of the year simply can’t be sustained for the whole year so look for a consolidation/correction in the near future.

2019 In A Nutshell

The final numbers are in and it’s always nice to review the big picture on how markets performed over a year. We are so bombarded with information that I reckon we focus too much on the immediate rather than the big picture. We lose perspective.

So here’s what happened in 2019 to benchmark against how well you went.

– The official cash rate was reduced from 1.50 per cent to 0.75 per cent with quarter per cent rate cuts in June, July and October.

– The Aussie dollar eased slightly against the greenback over 2019 but was pretty volatile during the year. The Aussie started the year around US70.6 cents and ended the year near US70.15 cents. It hit highs of US72.68 cents in late January and a decade low of US67.08 cents in early October.

– The Australian sharemarket started 2019 with the All Ordinaries at 5,709.4 and the ASX200 at 5,646.4. The All Ords ended 2019 at 6,802.4 points (up 19.1 per cent) with the ASX200 at 6,684.1 (up 18.4 per cent). Australia was 23rd strongest of 72 global sharemarkets

– Total returns on Australian shares (All Ordinaries Accumulation index which counts in dividends) lifted 24.1 per cent over 2019, hitting record highs in late November. Returns on shares posted the best gains in a decade.

– Returns on dwellings(houses and home units) rose by around 5 per cent in 2019

– Government bonds lifted by around 8 per cent.

– The Commodity Research Bureau futures index rose by 9 per cent over the year. At one end of the spectrum, thermal coal fell by 34 per cent with liquefied natural gas (LNG) down by 44 per cent. But beef prices soared by around 44 per cent, iron ore gained 26 per cent, crude oil lifted by 34 per cent and gold gained 18 per cent.  Base metal prices were mixed with zinc down 9 per cent while nickel rose by almost 32 per cent. Rice rose by 10 per cent with sugar up 11 per cent but cotton lost 4 per cent and wool lost 16 per cent.