Australia and the world are simultaneously undertaking monetary and fiscal policy stimulus. This is a very significant tail wind for the global economy and once we enter a post-COVID-19 recovery phase, it will likely be incredibly expansionary for global growth and a positive for Australian and global share markets alike.

Opportunities and risks in a post COVID-19 world

While the pandemic has caused considerable distress to human life, we have some observations from how day-to-day life has responded to this crisis. An interesting point to note, is that many of the key trends pre-COVID-19 have accelerated throughout the crisis and are well positioned to continue their structural growth in a post-vaccine world.

​These include:
  • E-commerce
  • Digital delivery of food and beverage
  • Working from home
  • Nesting
  • Infrastructure
  • Cashless society
  • Active wear versus formal wear

While the world will recover from COVID-19, it’s likely to be a different place and these trends will continue to shape the future. The strategy is driven by this long-term perspective, and thus is investing in good quality businesses benefiting from these themes and run by strong management teams.

Interest rate rises are still probably a year or two away, as we navigate the demand destruction resulting from COVID-19 measures. However, make no mistake, the signs of the next move in interest rates are certainly in the making. 
  • NAB’s business confidence index hit a 31-month high.
  • NAB’s business conditions index hit a 20-month high.
  • Westpac’s consumer confidence hit a 12-month high.
  • Retail is up 7.1% this year.
  • New car sales turned positive after 2 ½ years, with people buying 10,000 more cars in November than the same month last year.
  • Production & construction indexes all up.
  • The value of new loan commitments for housing rose by 0.7% in October to record highs. Loans are up over 34% in five months.
  • The value of Aussie homes hits record highs with house prices are up 4.5% for the year, despite a recession!

​Whatever your take on COVID or view on the economy, you have to accept the above indicators look great for 2021.

Should you have any further questions regarding the above, please do not hesitate to contact our office on (02) 9369 5333.