The All Ordinaries Index (INDEXAS: XAO) has fallen around 1% in early trading amid renewed worries about the global economy.
What’s Going On In The Share Market?
Overnight we learned that the trade war between China and the US is starting to hurt the US economy.
American manufacturing is starting to decline, along with a lot of the world’s manufacturing power. The US saw lower production, new orders and lower employment.
It’s not as though the trade war is easing. During the past week the United States implemented its 15% tariff on US$110 billion of Chinese goods. China’s response was to increase tariffs on US$75 billion of US goods to 10%.
All this time I imagine that US President Donald Trump was expecting China to give in to his demands. He is used to winning by essentially bullying people in his personal business life.
It’s the worries about the trade war that has caused shares like BHP Group Ltd (ASX: BHP) and A2 Milk Company Ltd (ASX: A2M) to both fall around 1.5% at the time of writing.
Where To Invest?
So the US and Chinese economies could be heading towards mutually ensured damage. Europe isn’t looking great, particularly in the UK where Brexit seems to be ripping apart political parties and no progress has been made after two years.
Despite that, I do think that the UK share market could be contrarian idea with how low the Great British pound has fallen and how low the valuations of UK companies have gone, even if they’re global ones like HSBC and BP. So, the BetaShares FTSE 100 ETF (ASX: F100) could be an idea.
I also think that western economies and stock exchanges like Canada, New Zealand and Australia could be good. Amazingly, Australia’s current account showed a surplus of $5.8 billion in the June 2019 quarter.
Perhaps that means that it’s time to invest in BetaShares Australia 200 ETF (ASX: A200) and get more exposure to Australia’s biggest blue chips?
I’m happy enough to stick to investing in quality individual businesses on the ASX, but I do think we need to be more picky these days. That’s why I like the idea of the reliable shares in the free report below the most.
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