Continuing the theme of strong equity market returns and putting the miserable December period into the history books, the ASX200 rose by 9.5% between January and March, whilst the MSCI World Index was up 11.6% over the same period.

This rebound is largely attributable to the Fed’s sudden “pivot” on rate hikes (unambiguous backflip from a policy perspective), with Chair Jerome Powell stating in early January that the Fed would be “patient” with respect to monetary policy.

The RBA left rates unchanged at 1.5% in March, having switched to a neutral policy bias in February. 4Q GDP was soft for a second consecutive quarter at 0.2%. GDP growth has slowed sharply from a 4% annualised pace in the first half of the year to around 1%, led by softer household spending and residential construction.

Although the unemployment rate dipped below 5% in February, it masked a lift in unemployment in NSW and Victoria. Leading indicators of employment growth have slowed and the NAB business conditions index sits close to long-term averages.

NAB Business Survey was soft again, with modest but broad declines across most component indices.

US GDP growth slowed to a 2.2% pace in the December quarter. US consumer spending and housing have slowed despite still solid employment growth and higher wages growth (a cycle high of 3.4%).

China seems to have stabilised after the slowdown in 2018. Some easing in financial conditions via lower bank reserve requirements and increases in overall credit growth, as well as a range of modest fiscal easing measures seem to be flowing through to the economic data.


Adapted from DMP Asset Management.

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Managing Director

Talal currently serves as a Non-Executive Director on the Whitlam Institute and Western Sydney University Foundation Council Board. He also serves as Chairman of First Quay Capital and Chairman of the Australian Arab Dialogue. Talal has also served on the Australia Post, Board of Sydney Ports, Macquarie University and the Western Sydney Area Health Service and the Chairman of the Department of Foreign Affairs and Trade; Council of Australia Arab Relations. In an executive capacity, Talal spent 10 years at PwC as a director and strategist, and at investment firm Babcock & Brown in the Corporate Finance Group and later in the Technical Real Estate Division. Later Talal held leadership positions in Better Place Australia, Platinum Hearing and Star Transport Australia.

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