Global share markets (or equities) made further gains in November as synchronised global growth, solid corporate earnings and progress on the tax reform proposal in the US provided a tailwind for risk assets. The MSCI All Country World Index returned 1.1% over the month (in local currencies).
U.S. equities had yet another positive month with the S&P500 rising 2.8% during November bringing it close to record highs. This marked the 8th positive month in a row and brought year to date returns up to 18.3%.
Shares in consumer companies saw the strongest gains in November, as the holiday selling season got under way. Preliminary data showed that Black Friday online spending increased significantly from the previous year.
European equity markets reversed their gains of the previous month with the Bloomberg European 500 Index falling 2.4%. A stronger euro (which dampens the profitably of Europe’s exporters) and general profit taking were largely to blame for the move lower.
On the economic front the backdrop for the Eurozone remains bright. A number of forward-looking economic indicators suggest the Eurozone economy will be entering 2018 in good shape.
In China, the Shanghai Stock Exchange Composite Index fell 2.2% over the month. China’s economic activity data for the month of October was fairly disappointing. In addition a meaningful pull back in the global technology sector over the second half of the month impacted Chinese counterparts.
Japan’s equity market added to October’s strong gains with the Topix returning 1.5% in November. The supportive global growth backdrop and a solid set of quarterly corporate earnings buoyed the market.
Emerging equity markets posted their first negative month of returns in 2017 with the MSCI Emerging Markets Index falling 0.9% over the month (in local currencies). Still, emerging markets have had a stellar year with the Index up 24.8% as at the end of November.
In Australia, equities tracked higher with the ASX200 Accumulation Index returning 1.6%. The market was led higher by the ‘consumer durable and apparel’ sector which was up 14.1%.
Back home and the NZ50 Gross Index nudged 0.5% higher over the month. The retirement village/aged care sector performed particularly well during the month, as investors took comfort from Ryman Healthcare’s and Arvida’s solid earnings results. Also, after underperforming the wider market for the majority of 2017, Listed Property Vehicles pulled back some underperformance, with the sector returning +3.6% in November.