Australian stocks were one of the worst performing asset classes in August, shedding 1.6%. Domestic reporting season saw companies that were “priced to perfection” punished for either meeting expectations or just missing.

• The June half seemed tough for Australian corporates, with profits falling across resource, bank and industrial sectors. Best performing sectors were linked to the consumer and housing.
• Australia’s Reserve Bank cut interest rates to an historic low of 1.5%, citing moderating Australian and Chinese growth. It was Governor Glenn Stevens last meeting, with Deputy Philip Lowe taking over.
• The US Federal Reserve met at Jackson Hole, and continued to signal that a lift in interest rates will happen this year.
• Fund flows into Emerging market debt and equity slowed to 2 month lows, as a hawkish Fed spooked markets.
• The Bank of England joined the stimulus party, cutting interest rates to 0.25%, and buying bonds.
• Commodity prices recovered somewhat on the back of a Chinese steel restocking cycle, with coking coal a major beneficiary. Oil and coal prices were over 10% stronger.