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Sharemarket update Feb 2019

The Australian sharemarket has had another excellent month and recouped further losses experienced in the last quarter of 2018. The All Ords rose from 5,937 to 6,233 (at time of writing) meaning an increase of exactly 5%.

The result for the Dow Jones was similar with an overall rise throughout February just a shade under 4%.

Factors contributing to this stabilisation include the Fed Reserve signalling that it is unlikely to amend it’s monetary policy within the first 6 months of 2019. It had been suggesting rate rises, but after slowing growth in China, Brexit concerns and it’s own Government shutdown, etc. they now appear to be “sitting tight” and waiting o see if any inflationary pressures emerge.

Domestic inflation has come in under target at 1.8%, but the RBA is confident it will rise again to be within the 2%-3% band that we generally strive for. On the negative side, the RBA had been hoping to see a rise in discretionary spending, but consumer confidence levels have fallen so far this year which suggests this will not be the case.

The $AUS rose sharply at the start of the month to nearly 73c, however has now dropped back to where it began at around 71.5c to the $US.

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