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Thank you and best wishes for the New Year

Peter Warnes  |  06 Jan 2017Text size  Decrease  Increase  |  

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Peter Warnes thanks all subscribers for their custom in 2016, while vowing to continue to improve the quality of Your Money Weekly as an insightful, wealth-creating publication in the coming year.

 

The dawning of 2017 sees the curtain fall on one of the most tumultuous years for global financial markets. While most major global indices finished the year in positive territory, the year-end masks a turbulent year where bouts of volatility undermined investor confidence.

The most memorable major events were the most unexpected--Brexit and Donald Trump's election to the office of President of the United States.

The Wall Street Philharmonic conducted by Donald Trump tried desperately to orchestrate a Dow Jones 20,000 by the close of 2016. It has fallen just short, but the US market rally since the election victory has been of Triumphal March of Aida proportions.

Donald Trump could be the elephant in the room in 2017. Federal Reserve chairman Janet Yellen will have a meaningful role, with the US federal funds rate to increase, possibly doubling. Financial markets will need to be ready to absorb the impact.

The resources sector, smashed in 2015 as commodity prices slumped, reversed all the losses and was the best-performing sector of the market in 2016. We underestimated the impact the Chinese stimulus in early 2016 would have on commodity prices.

Supply-side disruptions, including the Samarco disaster in Brazil and weather-related issues in Australia affecting the supply of both iron ore and coal, added to the strength of the commodity price recovery.

We anticipate some retracement in 2017. The prices of many resource companies currently anticipate existing commodity prices will be maintained through 2017 and in some cases beyond.

I sincerely thank all our subscribers for their loyalty in 2016. I can assure you the Morningstar team will work harder than ever to improve the quality of our research and recommendations in 2017.

Independent research and recommendations on more investment alternatives including listed investment companies, managed funds and exchange-traded funds will be added to the normal weekly company coverage.

We're continually striving to make our content more timely and relevant, while also showcasing the breadth and depth of both our Australian and international investment research.

I wish all subscribers a safe, healthy, and prosperous New Year and vow to continue to improve the quality and content of both the Your Money Weekly newsletter and Morningstar.com.au.

Premium subscribers have exclusive access to Peter Warnes' Holiday Extra report, a companion piece to Forecast 2017.

 

Peter Warnes is Morningstar's head of equities research. Any Morningstar ratings/recommendations contained in this report are based on the full research report available from Morningstar.

© 2016 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution. This information is to be used for personal, non-commercial purposes only. No reproduction is permitted without the prior written consent of Morningstar. Any general advice or 'class service' have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), or its Authorised Representatives, and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product's future performance. To obtain advice tailored to your situation, contact a licensed financial adviser. Some material is copyright and published under licence from ASX Operations Pty Ltd ACN 004 523 782 ("ASXO"). The article is current as at date of publication.