Market & Portfolio Update – October 2019
Market & Portfolio Update – October 2019
October provided only modest changes in value for most diversified portfolios. While portfolios gained from allocations to global shares, lower returns on local shares and fixed interest investments kept performance relatively static after solid gains in the year so far.
The United States market was a strong performer amongst the more developed countries, benefiting from cooling trade war tension. The market also continued to benefit from central bank policy aimed at supporting growth, with the Federal Reserve lowering its cash rate to 1.5% from 1.75% at the end of the month.
In contrast, it was a softer month for New Zealand shares, driven by lower share prices on the listed electricity generators. They were impacted by the New Zealand Aluminium Smelter announcing a review of the Tiwai Point smelter near Bluff, with a possible closure on the table. The smelter consumes approximately 13% of NZ’s electricity and is likely trying to pressure the electricity generators into a lower price for the electricity it consumes.
Disclaimer: This article has been prepared for the purpose of providing general information, without taking into consideration any particular investor’s objectives, financial situation or needs. Any opinions contained in it are held as at the report date and are subject to change without notice.
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March saw the Coronavirus have a more tangible effect at home, with the move to lockdown in New Zealand taking it from a global event to something with a very clear impact on our day-to-day lives. Meanwhile, share markets around the world continued to be volatile, with the US S&P 500 index staging a dramatic partial 18% recovery in three days towards the end of the month.