DelphiNews August 2014

I’m pleased to enclose the latest edition of DelphiNews.

Market Update

The recent Market Update, notes that global economic growth has proven resilient despite the geopolitical tensions in the Ukraine and Middle East. The US economy has rebounded strongly in Q2, continuing its upward trend after a weak start to the year. Outlook for the Chinese economy remains positive following a slow but steady recovery in Q2.

There has been an improvement in the Eurozone’s manufacturing data generally in July; however it remains impacted by the crisis in the Middle East and Ukraine. The Eurozone Q2 economic growth was flat but in line with expectations. The UK economy continues its slow recovery.

In Asia, data for Q2 indicates a stabilising Chinese economy in line with Government forecasts for 2014. On the other hand, the Q2 Japanese economy was impacted, as expected, by the increased sales tax in April, although this is anticipated to be more of a one-off event.

On the home front, economic growth remains in line with forecasted targets. The RBA has once again left the cash rate unchanged at 2.5% in August, with interest rates anticipated to remain at this level well into 2015.

Economic Update

In the Economic Update, Brian Parker, Head of Portfolio Specialists Group at MLC, reviews events in Australian and Overseas markets during July. Brian states that the World share markets were quite mixed during the month, whilst the Australian market had a terrific month. However, MLC see some risk of higher inflation over the medium to longer term.

Investment Insight

In the article below, Portfolio Specialist Kajanga Kulatunga explains why in the next few years bond yields aren't likely to bounce back to the levels we saw in the decades before the GFC.

Inflation Risk

Susan Gosling, Head of Investments at MLC, discusses ‘Inflation, uncertainty and portfolio management: protecting the real value of investors’ portfolios’ in the article below.

If you or if you or a family member would like discuss any of the issue raised above or if you wish to review your current investment strategy please contact us.

Regards

Vince Dore CFP
Director