The Australian share market rose (+0.4%) in October underperforming global share markets significantly. Strong gains in the resources sector were the only thing preventing a negative return. Despite the small return for the month, the long-term returns remain very strong. The 1yr, 3yr and 5yr returns for Australian shares are all above 12.5%p.a.
The best sectors for the month were Materials (+4.3%) and Energy (+3.7%), while IT (-8.4%), Consumer Discretionary (-6.8%) and Healthcare (-4.8%) all fell heavily.
The world share index was up (+3.3%). The US market (+2.1%) and the NASDAQ (+4.7%) both set new record highs. Since the launch of ChatGPT in November 2022, 75% of the US share market gains have been related to AI companies.
The UK rose (+4.8%), France (+1.0%) and Germany (+0.1%), while the Chinese market dropped (-1.6%). China aside, Asian share markets jumped significantly – Taiwan (+9.3%), Japan (+16.7%) and Korea returned (+20.7%) for the month. The Korean share market is up an incredible (+72.0%) for the year so far on the back of AI investment.
Nvidia became the world’s first US$5 trillion company while Apple became the 3rd public company to reach US$4 trillion in value. Putting that into perspective Nvidia is now worth approximately 8% of the entire US share market and more than the share markets of Germany, France and Italy combined.
Home values grew (+1.1%) for October with Perth (+1.9%), Brisbane (+1.8%) and Adelaide (+1.4%) leading the way. The total value of the residential property market has now reached $12 trillion, having more than doubled over the past 10 years. The increase in house prices has pushed the average rental yield to its lowest level in 2 years – currently 3.6%.
The price of Iron Ore was up (+1.6%), and Gold (+3.7%), while Oil fell (-2.4%), and Bitcoin (-2.9%).
The inflation rate hit 3% giving Australia one of the highest inflation rates in the developed world and tempering the expectation of any further rate cuts. The unemployment rate dropped to 4.3%. The AUD fell (-1.0%) against the USD, but gained (+0.7%) against the Pound. It looks like the best value overseas Christmas holiday this year is either Japan or New Zealand with the AUD having made strong gains against both over the last 6 months.
