The Australian share market was up (+1.3%) for June, its third straight month of gains and the highest monthly close on record. Conversely the dividend yield at the close of June was 3.29%, that’s the lowest it’s been since June 2001 if you exclude the Covid years.
Energy (+9.0%) and Financials (+4.3%) were the best sectors while Consumer Staples (-1.7%) and Materials (-3.4%) were the worst.
The world share index rose a further (+3.9%) for the month. The US was the main driver (+5.0%), along with Japan (+6.6%), Hong Kong (+4.1%) and China (+2.9%). The UK (-0.1%), Germany (-0.1%) and France (-1.6%) all went backwards.
House prices have been rising for the past 5 months and that run continued in June, up (+0.4%). Adelaide recorded the largest gain (+0.6%), Sydney (+0.5%), Melbourne, Brisbane and Perth all rose (+0.3%).
The inflation rate was 2.1%, and interest rates remained unchanged for the month. The unemployment rate jumped to 4.3%, while the youth unemployment rate (15 to 24 yrs of age) is now 10.4.
The price of Iron Ore fell (-1.5%), Gold (-2.2%) and Bitcoin (-3.9%) while the price of Oil jumped (+9.8%).
2025 Financial Year
The Australian share market delivered a total return of (+13.7%) for the financial year, the US market (+16.8%), Gold (+44.8%), Bitcoin (+73.3%) and national house prices increased (+7.1%).
It was the strongest Australian share market return since the 2021 financial year and the 3rd best in the past 12 years. The 2025 financial year also marked the 12th year out of the last 13 that the US share market has outperformed the Australian market. Although last financial year, Germany (+30.7%) was the best of the major stock markets.
A very surprising 12 months in terms of returns, but digging a little deeper reveals just how frail the figures were.
In Australia, three Banks contributed significantly to the share market return. The CBA, Westpac and National Bank produced 49.8% of the entire share market return. Without those three Banks, the Australian share market would have returned (+6.7%) for the year.
Australian company earnings which historically drive share market returns actually fell (-4%) last financial year and (-10%) for the 12 months before that.
The US share market fell (-19.0%) in April, and then just 2 months later hit a record high point, after there was a pause in the tariffs. At the same time investors were also forcing the price of Gold to a record high worried about US debt and stability.
Only one factor links all the movements above, and that is Trump. I can’t remember a time in history when so much depended on one man who offers so little – but here we are.
