Monthly Economic Wrap

During December:

  • The global economy, which has proved surprisingly resilient this year, is expected to falter next year under the strain of wars, still-elevated inflation and continued high interest rates.
  • The Paris-based OECD has estimated that international growth would slow to 2.7% in 2024 from an expected 2.9% pace this year. That would amount to the slowest calendar-year growth since the pandemic year of 2020.
  • A key factor in the slowdown is that the OECD expects the world’s two biggest economies, the United States and China, to decelerate next year. The U.S. economy is forecast to expand just 1.5% in 2024, from 2.4% in 2023, as the Federal Reserve’s interest rate increases, 11 of them since March 2022, continue to restrain growth. The Chinese economy, beset by a destructive real estate crisis, rising unemployment and slowing exports, is expected to expand 4.7% in 2024, down from 5.2% this year.
  • Share market performance was exceptional for November. The S&P 500 rose by 8.9%, while the Australian S&P 200 gained 4.5% on a price basis.
  • Global shares ex-Australia performed very well during November, producing a return of 4.4% on an unhedged basis. The result was even better for hedged global shares, gaining 8.0%.
  • Both in Australia and Globally, Growth and Small Caps were the best performing styles for the month.
  • Within Fixed income markets, both Australian government bonds and credit gained ground for the month. The main Australian fixed interest index, the Bloomberg AusBond Composite 0+ Years Index was up 3.0%, while the Bloomberg AusBond Credit 0+ Years Index gained 1.8% for the month.
  • Global High Yield bonds, as measured by the Bloomberg Barclays Global High Yield Total Return Index Hedged into AUD had a great month, gaining 4.4% for November.

Read more in the Monthly Economic Wrap here.


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