Practical tips, insights and articles to help you build the business, wealth, and lifestyle you want

3 Minute Economic Summary: September – October 2020

Article By Rebecca Faiers | | Financial Planning
  • Markets were volatile over the month of September with key contributors being a surge in COVID-19 cases, the US presidential election speculation and expensive valuations across technology stocks (which led to a correction). Markets have been improving over the month of October, particularly in Australia on the back of the Federal Government’s Annual Budget.
  • The Australian Government announced further stimulus measures aimed at regrowing the economy through job creation and increasing consumer spending. A key measure was the bring-forward of progressive tax cuts for individuals which were slated for 2022.
  • The RBA has kept the cash rate unchanged at a record low of 0.25%, although it is highly anticipated that the cash rate will drop to 0.10% after the November 3rd meeting. This would help make borrowing cheaper for the Government, businesses, and households.
  • The unemployment rate has decreased slightly to 6.9%. Despite the high figure, unemployment has been better than expected. A risk to the Australian economy is that high unemployment leads to a longer-term recession. The next six-months will paint a clearer picture on unemployment rates as Job Seeker and Job Keeper payments are phased out.
  • In the US, the presidential election is just 1 week away. Polls currently have Democratic nominee Joe Biden marginally in front of Republican incumbent Donald Trump. The US continues to struggle with COVID-19 cases, which is affecting the country’s economic recovery.
  • The reversal of lockdowns in Asia continues to kickstart economic activity as people return to shops and go back to work. The outlook for Asia is positive as a result of low valuations and the recovery of COVID-19 compared to the rest of the world.
  • In China, the Government announced a “dual circulation” strategy aimed at reducing its dependence on overseas markets and technology in its long-term development. Ongoing tensions with the US have exposed China’s vulnerability as it relies heavily on high-tech products from the US. The Chinese Government hopes to spur domestic innovation leading to domestic supply chains.

Altitude Financial Planning is a Corporate Authorised Representative of Altitude Financial Advisers Pty Ltd
ABN 95 617 419 959 
AFSL 496178

The information contained on this website is general in nature and does not take into account your personal circumstances, financial needs or objectives. Before acting on any information, you should consider the appropriateness of it and the relevant product having regard to your objectives, financial situation and needs. In particular, you should seek the appropriate financial advice and read the relevant Product Disclosure Document.