Bears, Bottoms, and Budding Opportunities
The fourth quarter of 2018 did not usher in the typical year-end rally that investors have come to expect in recent years. Global equity markets got off to a weak start, failed to recover, and ultimately plummeted, as weak business indicators collided with perceived governmental policy risks with respect to the Federal Reserve.
In the second quarter volatility waned and performance decoupled as divergent backdrops created variances in returns for assets classes and markets across the globe. The winning trades for the second quarter were in the U.S. energy sector, U.S. small companies, and a select group of technology and consumer discretionary stocks.
Volatility Awakens: A Market Review
The beginning of the first quarter was serene and pleasurable, as equity markets levitated on the back of increasing earnings expectations and solid world economic underpinnings. But the market euphoria didn’t last long.
Third Quarter 2017 Market Review – Climbing The Wall of Worry
The third quarter of 2017 was highlighted by unfavorable seasonal effects and a steady stream of nerve wracking geopolitical developments, but despite a challenging environment world equity markets persistently fought off short-term jitters and closed out the quarter solidly in the green.
Second Quarter 2017 Review & Outlook – Game Plan for a Market Hangover
Overall, the first quarter was a positive one for investors. However, as the second quarter gets underway, markets seem to be entering an overdue post-election hangover phase. For now, the overall weight of the evidence suggests the backdrop remains constructive, and thus any pullback should provide an opportunity to adjust portfolios to take advantage of anticipated policy changes that have so far been delayed, but are still likely to fall into place eventually. Of course, there are also risks to the outlook, so we’ll continue to look for signs of more deterioration that could create an unexpected detour on our roadmap.
Hangovers and Roadmaps
2016 began with a thud and ended with a bang. After one of the worst-ever starts to a year, U.S. stocks managed to rebound and ultimately finish the year with solid gains.
A Low Conviction World
The third quarter was a fairly placid one for investors, though there was major diversity in return profiles depending on what asset class, sector, or country one was invested in. In the U.S., the leading sector was clearly technology stocks, while elsewhere, Japan, Emerging Markets, and European stocks also had positive returns for the quarter.