Consumers in Australia are the most optimistic they have been in several years, which is a great thing for consumer stocks to lead a potentially sustained equities turnaround in Australia.

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The large fiscal stimulus package passed earlier in the month is helping to boost risk sentiment among investors. Australia is also moving towards opening international travel with some countries as the COVID-19 outbreak shows some signs of stabilisation. In addition, Victoria state is now easing its lockdown as cases fall, which is another positive sign for Australian consumers and companies.

The risks to any short term gains are a breakdown of the US stimulus package talks, which do not seem to have progressed much in the last week as we approach the election date. Likewise, a resurgence in Covid-19 cases in the county could lead to a “risk off” scenario in the equities markets.