Most major global markets continued to improve over February, strengthened by the positive progress coming from the US-China trade negotiations and the implications of the dovish stance established by the US Federal Reserve earlier this year.

The Dow Jones and the Nasdaq gained +4.03% and +3.60% for the month respectively (on a total return basis). The US earnings season has been fairly positive, although companies there are now starting to see margin pressures stemming from rising wages and tariffs.

The Australian market (as represented by the S&P/ASX 200 index, total return) gained +5.98% for the month, with the portfolio benchmark (S&P/ASX All Ordinaries Accumulation index) gaining +6.05% for the same period.

The Australian earnings season has also been positive on average, with most companies coming in line with expectations.

All sectors, apart from Consumer Staples, ended the month with positive gains. Financials was the biggest gainer (+8.2%) as the big four banks surged on less adverse final findings from the Royal Commission than previously perceived. This has hurt the performance of the Crescent Wealth Super portfolio as the mandate does not permit any exposure to this sector.

Gold saw a strong rally during the month, well supported by global growth concerns and a weaker USD as the US Federal Reserve took on a more dovish stance.

The price of Crude Oil also saw strong gains on the back of less than expected increases in crude inventories along with a decline in OPEC monthly production for last month.

The Australian Dollar experienced volatility in February. The local currency dipped as the RBA commented that the probabilities for a rate move either direction appeared to be more evenly balanced. News out of China later in the month banning coal imports from Australia subsequently sent the AUD lower.

Adapted from DMP Asset Management.

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