The majority of the banks had a good reporting season in the period ended 31 December 2019. However, all this is now history and what lies ahead in the next 12-24 months will be of more concern as there appears to be no escaping COVID-19 for now.
Following the RBA’s decision to lower the cash rate by 25bp to 0.50%, we have decided to rebase sector earnings expectations. This is in anticipation of slowing home and business lending growth and another 25bp rate cut linked to COVID-19.
Australian investors don’t need to venture too far to take advantage of offshore growth opportunities and benefit from foreign currency earnings, but there are many other opportunities that Australian investors simply cannot get exposure to by investing locally.
Key drivers of energy markets will be US-China trade tensions and the potential for a resolution, European economic activity, and supply constraints as new projects are subjected to increasing environmental and social scrutiny.