Markets rebound after a volatile end to 2018

 

Share markets have rebounded from their December lows, although generally remain below their 2018 peaks. 

Following an orderly correction through October and November, share markets were sold off sharply in December. The sell-off was driven by concerns over the impact of higher US interest rates on economic growth, uncertainty over the US-China trade dispute and other geopolitical concerns. 

Share markets have subsequently bounced sharply from their 2018 lows, supported by the US Federal Reserve tempering the likelihood and size of future interest rate increases. This alongside hope that the US and China may achieve some form of trade agreement have contributed to stronger share market performance through January as highlighted in the chart below, which shows the rebound in the US share market.

 

As shares make up almost half of the Growth (Cbus MySuper) option's asset allocation, the share market rebound was a major contributor to the Growth option's strong return of 2.40%1 for January.

 

1Past performance is not a reliable indicator of future performance. Based on the crediting rate, which is the return minus investment costs and taxes, the Trustee Operating Costs and reserves. Excludes account keeping administration fees.