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G20 Summit: Effects on Australian Financial Markets

Stuart Lucy

Stuart Lucy is an Investment Specialist at the Australian Stock Report, and has gained exposure to funds management and investment banking throughout his career. He draws on this experience to provide macroeconomic commentary and actionable investment insights to clients. Stuart is responsible for writing reports, is involved in delivering Macrovue webinars and provides general advice to our members on portfolio construction. Stuart currently holds RG146 General and Securities qualifications.

The G20 Summit in Osaka (Japan) commenced on Friday 28 June 2019 and ended on Saturday 29 June 2019. This year’s G20 summit was focused around global trade, economic and environmental issues.

g20-summit-stock-market

The main focus for companies and investors was trade talks between President Trump (United States) and President Xi Jinping (China). Both leaders agreed to halt further increases on tariffs, and agreed to begin a new round of trade talks. This is a positive for companies trading internationally and investors, with the hope that the US and China can come to a trade agreement and end the ongoing trade war.

The largest takeaway from the G20 was the EU (European Union) and the MERCOSUR (South America trade block) signed a trade agreement that will aim to reduce tariffs and increase trade between both regions.

The summit objectives and outcomes look to positively affect the global economy and Australia’s position in it. Australia is a small open trading economy and strongly benefits from a global effort to reduce trade barriers and increase trade flows of goods and services. With a new hope for a close to the US and China trade war, Australian companies and investors should be more optimistic than before the G20 summit.

The market today is up, remaining at around an all-time high since pre GFC levels, suggesting Australian equity market’s reaction to the G20 summit is slightly favourable.

 


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978) (“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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