Monthly Market Snapshot - November 2021 - The Monthly Market Snapshot publication provides commentary on the global economy and the performance of ...
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Monthly Market
Snapshot
November 2021
The Monthly Market Snapshot publication provides
commentary on the global economy and the
performance of financial markets
Market commentary
Global markets experienced elevated volatility Global leaders gathered in Glasgow at the start of
during the month, primarily attributable to the the month for the UN Climate Change
emergence of a potentially more transmissible Conference (COP 26) where there were several
COVID-19 variant, Omicron. News of the spread announcements made in areas including coal,
of the new variant resulted in a sell off in equities. deforestation and methane emissions, but there
was no general consensus that outcomes had
While US economic data was generally positive been achieved as hoped. However, climate
over the month, this was overshadowed by the change is an area where China and US agreed to
news of the Omicron variant. Consequently, the work together during the summit.
travel and leisure sectors were negatively
impacted the most followed by the retail sector. During the month, US President Biden
That said, US equities produced a relatively small announced that Jerome Powell would be
negative return for the month compared to the reappointed for a second four-year term as US
rest of the world. Federal Reserve Chairman, subject to approval
by the Senate. This removed speculation that
In Europe, the economic outlook is mixed. While perhaps Powell would be replaced by a new
the overall Eurozone Purchasing Managers Index appointee. There remains ongoing focus on
(PMI) survey rebounded after three consecutive inflation and the response by the US Fed, with the
months of decline, there is some divergence in potential acceleration of tapering of the
economic data between the underlying countries. quantitative easing program and interest rate
The severity of the latest COVID-19 wave has rises occurring sooner than anticipated.
been more acute in countries with lower
vaccination levels, such as Germany, and the Given the overall risk sentiment globally due to
reintroduction of restrictive measures in response Omicron, there was a movement to ‘safe haven’
weighed on sentiment. assets, with government bond yields falling and
the US dollar appreciating. The Australian dollar
The Australian equities market outperformed depreciated relative to major currencies over
most of its global developed peers in November, November, which had a positive impact on
driven mainly by strong performance within the unhedged international investments over the
Resources sector. In addition, economic activity is month.
rebounding in Australia as the economy recovers
post lockdowns. Australian listed real assets outperformed global
counterparts, partially driven by the larger
The oil price fell over the month on concerns of decrease in Australian bond yields.
potential lower demand given the increased
possibility of countries reimposing lockdowns and
travel restrictions due to Omicron. In addition, the
decision by the US Strategic Petroleum Reserve
to increase the supply of oil into the market, likely
also contributed to the downward pressure on the
oil price.
November Monthly Market Snapshot 1
© Frontier AdvisorsNovember 2021
Australian equities Fixed income
International equities ($A) Australian dollar
International equities Real assets
Details of the indices are in the table on the next page
November Monthly Market Snapshot 2
© Frontier AdvisorsNovember 2021
*Price Index
November Monthly Market Snapshot 3
© Frontier AdvisorsAsset class yields relative to history
November Monthly Market Snapshot 4
© Frontier AdvisorsAsset class long-term returns
November Monthly Market Snapshot 5
© Frontier AdvisorsAsset class long-term returns
November Monthly Market Snapshot 6
© Frontier AdvisorsFrontier Level 17, 130 Lonsdale Street
Melbourne, Victoria 3000
Tel: +61 3 8648 4300
www.frontieradvisors.com.au
@frontier_adv
Frontier does not warrant the accuracy of any information or projections in this paper and does not undertake to
publish any new information that may become available. While this information is believed to be reliable, no
responsibility for errors or omissions is accepted by Frontier or any director or employee of the company.
The advice in this paper does not take into account investors’ particular objectives, financial situation or needs.
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