Important Money Stuff This Quarter – October 2024

This is all you need to be smarter than 90% of your friends when it comes to all things finance.

Here’s our quarterly economic update with all of the important money stuff you need to know this quarter:

1. Australia and Global Economic Update (looking back)

• Australia: The Australian economy is slowing down. People are spending less money because the cost of borrowing is high due to increased interest rates. The country’s economy grew by only 0.2% from April to June 2024. Inflation, which makes everyday things more expensive, is still higher than desired but is expected to go down slowly over the next couple of years​(KPMG)​(RSM Global).
• Global: Around the world, the economy is mixed. In the U.S., companies are still making good profits, but some areas, like manufacturing, are struggling. Europe is starting to improve, especially in countries like Spain and France, though Germany is facing challenges because of its strong ties to China’s weak economy. China’s economy is struggling due to problems in the housing market, while Japan is doing better with steady growth ​(Russell Investments)​(IMF).

2. Investment Market Update:

• Global Stock Markets:
  • U.S.: U.S. companies are doing well and making strong profits, which has helped boost the stock market. But because people expect the economy to slow down, there is a risk that the market could drop if things get worse. It’s important to pay attention to job losses and company earnings​ (Russell Investments).
  • Europe: In Europe, stocks are cheaper than in other parts of the world, which makes them a good option for investors looking for long-term growth. Spain, Italy, and France are seeing some economic recovery, but Germany is still struggling ​(Russell Investments).
  • Asia (China & Japan): China’s economy is weak, but its stocks are cheap, so some investors see this as a chance to buy. Japan, on the other hand, is doing better, and its currency is undervalued, meaning it might be a good place to invest​ (Russell Investments).
• Australian Market: Australia’s stock market has had a rough time because people are spending less, and the mining sector is facing global challenges. However, there are still opportunities for investors, especially in companies that pay good dividends (a portion of company profits paid to investors). Fixed-income investments, like government bonds, are also doing better as interest rates have come down​ (Russell Investments).

3. Looking Ahead (Opportunities and Risks):

• Australia: Australia’s economy is expected to slow down more, with unemployment likely to rise to 4.5% by 2025. If inflation (the rate at which prices increase) keeps falling, it could create opportunities in sectors that rely on people spending money​ (RSM Global).

• Global:

  • Opportunities:
    • U.S. stocks could keep doing well if companies continue to make profits. In Europe, stocks are relatively cheap and could be a good investment as the economy recovers. Japan’s currency is undervalued, making it an attractive option for foreign investors​ (Russell Investments).
  • Risks:
    • If the U.S. or China’s economies slow down more than expected, it could cause global markets to fall. China’s slow recovery is especially concerning for countries that depend on it for trade, like Australia​ (IMF). European markets are also at risk if the U.S. economy weakens, and Australia’s high debt levels could hurt consumer spending in the long term.

Have a read through, and as always let us know if you want to discuss any of the above further. If you want to meet with us and you aren’t already one of our wonderful clients, you can book directly in with Kristopher here. If you’ve missed any of our recent articles, you can find them here.

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