Investment recap: rebounds & relapses in the September quarter

COVID-19 continues to impact global economies and markets, with volatility continuing throughout the September quarter.

The September quarter was a mixed bag of rebounds and declines. Globally, equities and other risk markets continued their rebound over the September quarter as investor sentiment strengthened due to the gradual reopening of countries and signs of economic recovery.

However, the rebound stalled and equity markets fell in September with a resurgence in COVID-19 cases in parts of Europe. 

The September quarter is expected to show a year-on-year drop in GDP of close to 5% for many countries (compared to a 10-20% drop in the June quarter), with the impacts now largely being focused on services sectors that have been severely disrupted. 

Significant levels of both fiscal and monetary stimulus have continued to aid global recovery. According to the IMF, global fiscal support by governments has now totalled over $11 trillion, and with an estimated $17 trillion of liquidity pumped into the financial system over the past six months. 

In the US, the S&P500 Index returned 8.8% for the quarter. The unemployment rate fell to 8.4%, marking the fourth consecutive decline after the April high of 14.7%. The Manufacturing Purchasing Managers Index (PMI) increased to 53.5 during September, whilst the Services PMI slowed to 54.6, with both indicators pointing to continued economic expansion. The Federal Reserve left its funds rate target range at 0-0.25% with no changes expected until 2023. 

Growth in China continued, with the Manufacturing PMI increasing to 55.9 in September from 55.2 in August, signalling levels of growth not seen since November 2013, with new orders and exports driving the manufacturing sector. Unemployment also continued its downward trend, decreasing to 5.6% in August.

On the other hand, within the Eurozone, economic recovery slowed over the September quarter as COVID-19 cases rose sharply in a number of countries. 

In Australia, GDP fell by 7% in the June quarter, but since then economic momentum has been on an upward trend, with ABS figures showing that 111,000 jobs were created in August and unemployment fell from 7.5% to 6.8%. Although Victoria’s stage 4 lockdown led to a significant strain on retail spending and business confidence, there was still a notable improvement in other Australian states.
The Australian dollar appreciated against most of the major developed market currencies (4.1% against the US dollar and 1.8% against the Yen) on the back of stronger investor sentiment. 

Australian shares

Australian shares, as measured by the S&P/ASX300 Index was flat and fell 0.1% over the quarter. 

Across the main sectors, performance was very diverse: Energy (-13.5%) and Utilities (-8.2%) were the weakest performing sectors, while IT (13.0%) and Consumer Discretionary (10.1%) led the market. Small Caps (5.7%) and Mid Caps (5.2%) outperformed large cap stocks (-1.9%) over the quarter.

International shares

International shares, as measured by the MSCI World Index ex-Australia (hedged into AUD) rose 6.6% over the September quarter. 


Australian unlisted property grew by 0.5% over the September quarter. 

Fixed interest

Bond markets also delivered positive returns over the quarter, with Australian bonds up by 1.0% and overseas bonds (hedged into AUD) up 0.7%. The US 10-year bond yield ended the quarter at 0.68% and the Australian 10-year at 0.79%.


The Reserve Bank of Australia (RBA) kept the cash rate at 0.25% during the quarter until recently, when it cut the cash rate to an all-time low of 0.1% on 4 November.

We’re here to help

It’s important to remember that volatility is commonplace when it comes to investing, and the volatility we’ve experienced in recent months is part of a long-term investment cycle. As always, our investment strategy remains focused on the long term to ride out the volatility we’re currently experiencing. 

We’re here to help if you have any questions about investments – just call 1800 757 607 to speak with a financial planner.


The information on this page has been issued by Maritime Financial Services Pty Limited (MFS). It contains general information that doesn’t take into account your individual objectives, financial situation or needs. It’s important to consider how appropriate this general information is in relation to your situation before making an investment decision. We recommend that you seek financial advice before making any decisions regarding your super or investments. The information on this page is current at the time of publishing.