October 2018 Economic Update
World equities sold off in October, based on a range of concerns. The two most important were the potential impacts of higher bond yields, and the prospect of the
U.S. or global business cycles running out of momentum. Higher bond yields have not only depressed returns from bonds but have also weighed on property and
infrastructure. The likelihood is that both the U.S. and global expansions are still intact, but risk levels have risen at this late stage of the cycle, and further volatility can be
expected. In Australia, the latest data suggests a reasonable rate of ongoing economic growth, though not at a pace that is likely to generate strong growth in corporate profitability.
