Market Update – August 2024

The Highlights:

  • Recession fears, sparked by a weaker-than-expected US jobs report in July, led to significant market volatility in early August. However, investor sentiment quickly shifted positively as optimism grew the US Federal Reserve would cut interest rates in September.
  • Shares and fixed interest (bond) markets experienced a V-shaped recovery after early falls to deliver solid gains in August, as investor concerns about a US economic slowdown were outweighed by the anticipation of imminent rate cuts which have traditionally been supportive for markets.
  • International shares continued to build on earlier gains, with investors gravitating toward defensive and interest rate-sensitive sectors. In contrast, Australian shares underperformed global markets due to a weaker-than-expected reporting season and increased uncertainty around the future direction of interest rates. Despite this, Australian shares still delivered positive returns.
  • Falling bond yields boosted returns for both global and Australian fixed interest markets, with government bonds and corporate bonds (credit) performing strongly.

Read the update here: Monthly Market Update – August 2024