Economic and market outlook – October 2024

The information in these articles is current as of 1 October 2024.

Welcome to our latest Economic and Market Outlook – October 2024.

This edition covers the following topics:

Australian economy

In the face of inflationary pressures, what is driving the Australian economy? The answers might surprise you. From government spending to immigration, these are sectors boosting the economy in ways some might not have considered. We also examine what the RBA’s next moves could be while Australian households continue to feel the financial pinch. Discover more of our views below.

International economy

A weakening labour market remains a concern for the US economy, and we investigate how it has influenced the Federal Reserve’s decisions in cutting interest rates. Over in Europe, we observe a complicated economic narrative emerging, as the region struggles against the rising competitiveness of China’s exports. Meanwhile, in China, their economy stagnation is presenting its own challenges and triggering more stimulus initiatives to support the property sector. Find out more on our outlook below.

Outlook and sector view for Australian equities

Despite continual growth, the Australian market presents a mixed bag. Valuation looms as a potential headwind whilst sector performance has deviated widely most notably between bank and resource names. Weaker household spending amidst inflation and interest rate headwinds pose challenges for the retail sector. For more on our perspectives, please see below.

Outlook for international equities

Strong performance by international markets with the US market leading the way sees us downgrading our outlook as valuations have become increasingly stretched. While there is some scope for optimism via easing monetary policy, recent price action relative to fundamentals are too difficult to justify. There is ample scope for opportunities below the surface, however. We detail more on our findings below.