Weekly Market Recap
Households in the driving seat
Week in review
- Australia real GDP 3.3% q/q in 3Q20
- Chinese PMI manufacturing rose to 52.1
- Australia national house prices rise 0.8% m/m
- Australia business confidence
- Australia consumer confidence
- ECB policy meeting
Thought of the week
Consumers have come to the rescue of the Australian economy, driving the expansion in the third quarter and lifting the country out of recession. Consumption accounts for around 55% of the economy so a healthy household was always going to be crucial for a successful recovery. The household savings rate remains high, creating a buffer to offset the fading support from the government’s JobKeeper and JobSeeker schemes and should smooth consumption over the coming quarters. However, this depends on consumers’ willingness to dip into these savings rather than using them to bring down debt. Net exports was the biggest drag. Simply put, Australia bought more than it sold last quarter, but this is likely to reverse in the coming quarters. The most worrying signal from last week’s national accounts is private investment. Residential and business investment were virtually flat over the quarter, but this masks the continued decline in private business investment which fell a further 3% q/q and is now a clear drag on the economy.
Households in the economic driving seat
Contribution to quarterly real GDP growth
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.