DelphiNews May 2015 & Federal Budget Summary

I’m pleased to enclose the latest edition of DelphiNews, which also includes a Summary of last night's Federal Budget.

Federal Budget

The Coalition Government’s second Federal Budget proposed some important changes, particularly for families, retirees and small business owners.

Market Update

At home, the Reserve Bank of Australia has cut the cash rate to a record low of 2.0% at its May meeting. The 12 May Federal Budget is expected to confirm the Commonwealth’s fiscal position is under both cyclical and structural pressure. See Budget Commentary below.

Severe weather and port strikes impacted the US Gross Domestic Product for Q1 2015, whilst US corporate earnings have remained resilient although impacted by the strength of the US dollar and oil prices.

Global oil prices have recovered, up 25% - suggesting the lows are now in place.

The European Central Bank’s quantitative easing program, whilst still early in its implementation, has shown positive impact on the Eurozone.

Whilst China remains on an easing bias with the PMI indicating that more stimulus measures may be required to ensure the economy doesn’t slow from the 7% annual growth rate seen in Q1.

Economic Update

In the latest Update, Brian Parker, Head of Portfolio Specialists Group at MLC, reviews events in Australian and Overseas markets during April. Brian notes that World share markets posted reasonable gains in April. Emerging markets enjoyed a
strong month, the Japanese market once again performed very well, and the US market fared pretty well after losing some ground in March.

If we look at how those translated in Australian dollar returns, hedged global shares won out in April, and unhedged global shares returns actually lost ground as the Australian dollar rebounded – it was up by nearly 4% against the US dollar.

If we look at our own share market, Australian shares posted a negative return, largely on the back of falls in the banking sector, which more than offset a bit of a rebound in mining stocks, helped along by some rebound in iron ore and other
commodity prices.

Please contact us if you have any questions regarding the 2015 Federal Budget and how it may affect you, or any of this month's articles.

Regards

Vince Dore CFP
Director

Vince Dore and Delphi Financial Management Pty. Ltd are Authorised Representatives of GWM Adviser Services Limited ABN 96 002 071 749, trading as Garvan Financial Planning/MLC Financial Planning an Australian Financial Services Licensee, Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia group of companies.

This advice may not be suitable to you because it contains general advice that has not been tailored to your personal circumstances. Please seek personal financial and tax and/or legal advice prior to acting on this information. The material contained in this newsletter is based on information received in good faith from sources within the market, and on our understanding of legislation and Government press releases at the date of publication, which are believed to be reliable and accurate. Opinions constitute our judgement at the time of issue and are subject to change. Neither, the Licensee or any of the National Australia group of companies, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this email.

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