Weekly Market Recap
The briefest of surpluses
Week in review
- Australia preliminary retail sales 2.4% m/m in June
- Australia fiscal deficit forecast to rise to x% of GDP in FY20/21
- Japan’s PMI manufacturing rose to 42.6
- Australia CPI inflation
- China CFLP PMI manufacturing
- U.S. FOMC meeting
Thought of the week
The updated forecasts from the Australian Treasury show a fiscal deficit which will rise to 9.7% of GDP in the current fiscal year, making the previously projected surplus look like wishful thinking. While the deficit is large in historical terms for Australia, the stimulus has so far been successful in the gap in household income caused by the COVID induced shutdown, even if it will not stop a higher unemployment rate. Larger amounts of government spending are likely to be an ongoing feature of the economy as effectiveness of monetary policy is pushed to the side and political appetite for austere policies fade. The best course of action by governments globally is to foster a more productive economy to outgrow the debt burden. However, just how fast any economy can grow may not be known until there is greater clarity on the economic scarring from the recent recession.
Deficit blow out
Underlying cash balance % of GDP
JPMorgan Global Research Enhanced Index Equity Fund
To achieve a long-term return in excess of the benchmark by investing primarily in a portfolio of companies, globally; the risk characteristics of the portfolio of securities held by the Sub-Fund will resemble the risk characteristics of the portfolio of securities held in the benchmark.