Fourth Quarter 2019 Fourth Quarter 2019: The Year ...
Global Market Overview
Fourth Quarter 2019
Fourth Quarter 2019: The Year Everything Worked
As of December 31, 2019
MSCI All Country World S&P 500
Russell 2000 MSCI EAFE MSCI Emerging Markets MSCI ACWI ex USA Small BBgBarc Multiverse BBgBarc US Aggregate BBgBarc US Treasury -0.8% ICE BofAML US High Yield BBgBarc Long US Gov/Cred -1.1% BBgBarc US TIPS JP Morgan EMBI MSCI US REIT -1.1% FTSE NAREIT Developed HFRI Funds of Funds SG CTA MF Index -3.6% Bloomberg Commodity Index BofA ML 3-Month T-Bill
9.0% 9.1% 9.9% 8.2%
11.8% 11.0% 0.6% 0.2%
2.6%
0.8% 1.8%
2.0% 2.5%
4.4% 0.5%
What a difference a year makes. After 2018 ended with stocks in free fall, markets rebounded sharply in 2019, with broad market indices pushing new highs daily during the fourth quarter. Last year's worries -- trade, global growth, and tightening monetary policy -- have each abated.
First to fall was concern for monetary tightening when the Federal Reserve first suggested a pause in rate hikes, then announced a single "insurance" rate cut in July, and ultimately cut rates three times in the second half of the year. Confounding underlying economic data supported the Fed's policy reversal. Weak manufacturing and slow wage growth left policymakers puzzled even as the economy created jobs well in excess of steady-state levels.
Trade worries dissipated as two main narratives seemed to emerge throughout the year: either the United States and China are getting close to a trade deal, or there is an increasing likelihood that President Trump and China President Xi Jinping won't escalate the trade war during the American election year. The election's impact on the stock market is likely to be a common media theme in the upcoming year, but if history is any guide, listening to broad predictions about the direction of equity markets based on election outcomes is likely to be more harmful than helpful.
2019 market details will sound like a familiar refrain to most market followers. Value mostly underperformed (again). U.S.
stocks outperformed international stocks (again). And interest rates, which according to prognosticators had nowhere to go
but up, declined (again). May the next year, and decade, be as interesting as the last.
EEEEmmmmbbbbeeeedddd
S&P 500
QTD 9.1%
YTD 31.5%
3 Years 15.3%
5 Years 11.7%
10 Years 13.6%
15 Years 9.0%
S&P 500 Value
9.9%
31.9%
11.5%
9.5%
12.2%
7.7%
S&P 500 Growth
8.3%
31.1%
18.7%
13.5%
14.8%
10.2%
Russell 2000
9.9%
25.5%
8.6%
8.2%
11.8%
7.9%
Russell 2000 Value
8.5%
22.4%
4.8%
7.0%
10.6%
6.9%
Russell 2000 Growth
11.4%
28.5%
12.5%
9.3%
13.0%
8.8%
MSCI EAFE (USD)
8.2%
22.0%
9.6%
5.7%
5.5%
4.8%
MSCI EAFE (Local)
5.2%
21.7%
7.7%
6.7%
7.2%
5.8%
MSCI Emerging Markets (USD)
11.8%
18.4%
11.6%
5.6%
3.7%
7.5%
MSCI Emerging Markets (Local)
9.5%
18.1%
11.5%
7.5%
6.1%
9.1%
BBgBarc US Aggregate
0.2%
8.7%
4.0%
3.0%
3.7%
4.2%
FTSE NAREIT Developed
2.0%
23.1%
9.3%
6.5%
9.2%
6.8%
HFRI Fund of Funds
2.5%
7.8%
3.7%
2.2%
2.8%
2.8%
BofA ML 3-Month T-Bill
0.5%
2.3%
1.7%
1.1%
0.6%
1.4%
Sources: Sellwood Consulting LLC, Morningstar Direct, Investment Metrics, Federal Reserve Economic Data Returns for periods longer than 1 year are annualized.
The Federal Reserve's chairman, Jerome H. 3700.0 Powell, attempted to ease the fears of
investors by suggesting that the Fed could readjust interest rates if global growth slowed.
The U.S. escalated the trade war with China, raising tariffs on $200 billion worth of Chinese goods and taking steps to tax nearly all of China's imports.
At the July 31st meeting, the Federal Reserve cut interest rates for the first time in more than a decade.
3200.0
2700.0
2507 22020..70%
Low: 2488 High: 2.8%
S&P 500 Index 10-Year Treasury Yield
Year-End Review
As of December 31, 2019
The initial public offering for Saudi Aramco, Saudi Arabia's state-owned oil company, raised $25 billion, valuing the company at $1.7 trillion.
The U.S. added 266,000 jobs and the unemployment rate matched a 50-year low in November.
2977
5.0
4.5 High: 3240
3231 4.0
3.5
Embed
Embed
3.0
Embed
Embed
2.5
1700.0
2019 consensus forecasts: S&P 500 : 3000 (CNBC) 10-Year Treasury : 3.4% (WSJ)
1200.0 12/31/18
3/31/19
6/30/19
1.7% Low: 1.5%
9/30/19
12..90%
1.5
1.0 12/31/19
Sources: Sellwood Consulting LLC, Morningstar Direct, Investment Metrics, Federal Reserve Economic Data, Wall Street Journal, CNBC
Global Economic Overview
Federal Funds Rate
As of December 31, 2019
6
70
2500
11
140
6.0%
5 4
60
10
2000
9
130
5.0%
50
3
8
120
4.0%
Federal Funds Rate
2
40
1500 7
Projected Federal Funds Rate
110
FOMC Dot Plot Median
1
30
6 1000
3.0%
0
5
100
20
2.0%
-1
500
4
-2
10
3
90
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 3 Mth 1 Year 3 Year 5 Year 7 Year 10 Year 20 Year 30 year
1.0% 0.0%
12/2019 Market Inflation Expectations
9/2019
12/2018
12/2016
12/2014
-3 Treasury Curve Steepness 10yr Yield - 2yr Yield Since 1976
3.5%
0
Market Volatility CBOE Volatility
Index: VIX
Since 1990
0
Inflation Adjusted Gold Price per Oz.
2
US Unemployment
Rate
Since 1968
Since 1948
US Treasury Yield Curve
80 Trade-
Weighted US Dollar Broad
Index Since 1995
Embed
5 Year
1.7
1.4
1.5
1.8
1.3 3.0%
Embed
10 Year
1.8
1.5
1.7
2.0
1.7 2.5%
Embed
20 Year
1.8
1.6
1.8
2.0
1.8 2.0%
Embed
CPI Year-over-Year
---
West Texas Crude Oil
61.7
Consumer Sentiment Index 99.3
US Corp Profits (% of GDP) ---
Real GDP Growth YoY
---
1.7
1.9
2.1
0.7 1.5%
54.1
45.2
53.8
53.5 1.0%
93.2
98.3
98.2
93.6
0.5%
9%
9%
9%
11% 0.0%
2.1
1.1
2.0
2.3
Federal Funds Rate
1.55
2.04
2.27
0.54
0.12
12/19
9/19
12/18
12/16
12/14
Sources: Sellwood Consulting LLC, Morningstar Direct, Investment Metrics, Federal Reserve Economic Data, CME Group
Arrows in the top-right charts represent year on year change.
Global Market Valuations - One Year Change
45
25
25
35
25
-5%
0%
40
-3%
1%
30
22
Expensive 35
20
20
-1% 2%
As of December 31, 2019
0%
-2%
Embed
Embed
Embed
Embed
5%
0%
30
25
19
25
15
15
20
16
20
1%
10%
2%
3%
3%
4%
15%
4%
5%
15
10
10
15
13
10
5% 7%
20%
6%
9%
6%
Cheap
5 US Large-
Cap Equity
5 US Large-Cap
Equity
5
10
10
US Small-Cap
Non-US Dev
Emerging
11%
7%
25%
8%
US Treasury
US Corporate
US High-Yield
Equity
Equity
Markets Equity
Bonds
Bonds
Bonds
US REITS
Dividend Yield = 1.8% Dividend Yield = 1.8% Dividend Yield = 1.5% Dividend Yield = 3.2% Dividend Yield = 2.6% Nominal Yield = 1.9% Nominal Yield = 2.9% Nominal Yield = 5.3% Dividend Yield = 3.7%
Shiller 10-Year S&P 500 P/E
Trailing R1000 12-Month P/E ex Negative Earnings
Trailing R2000 12-Month P/E ex Negative Earnings
Trailing MSCI EAFE 12-Month P/E Since 1988
Trailing MSCI EM 12-Month P/E Since 1995
10-Year Treasury Real Yield Since 1953
Corporate Credit Spreads
Since 1996
High Yield Credit Spreads
Since 1996
FTSE NAREIT US Real Estate Index
Real Cap Rate Since 1972
Arrows represent year on year change. Trailing 12 month P/E and cap rate metrics exclude the top and bottom 5%. P/E metrics calculated by Investment Metrics and Morningstar may use different methodology. 10-Year Treasury real yields are based on the constant maturity TIPS yields calculated by the Federal Reserve. Prior to 2003, real yields are calculated by adjusting the nominal yield with the prior 12 -month change in core CPI-U. Real cap rates are inflation adjusted using the applicable 10-year TIPS breakeven inflation rate. Prior to 2003, real cap rates are calculated by adjusting the cap rate with the prior 12-month change in the core CPI-U. Sources: Sellwood Consulting LLC, Robert Shiller Data, FTSE Russell, MCSI, Federal Reserve Economic Data, NAREIT
60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0%
30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0%
Info Tech, 14.4%
S&P 500 Sector Quarter Returns
Materials, 6.4%
Health Care, 14.3%
Commun, 9.0%
Utilities, 0.8%
Financials, 10.5%
Cons Staples,
3.5%
Cons Disc, 4.4%
Industrials, 5.5%
Energy, 5.5%
MSCI ACWI ex USA Region Quarter Returns
Real Estate, -0.5%
EMEA, 13.1%
North America, 5.1% Far East, 11.4%
Latin America, 10.6%
Europe, 8.9%
Asia Pacific, 6.9%
Info Tech, 50.3%
Sector and Region Returns
As of December 31, 2019
S&P 500 Sector 1-Year Returns
Commun, 32.8%
Industrials, 29.1%
Health Care, 20.8%
Financials, 32.1%
Cons Disc, 27.8%
Materials, Utilities, 27.0% 24.2%
Cons Real Estate, Staples, 29.0% 27.6%
Energy, 11.8%
MSCI ACWI ex USA Region 1-Year Returns North America,
28.2% Latin
Europe, 24.7%
Asia Pacific, 19.2%
America,
Far East, 17.7%
17.9%
EMEA, 21.4%
22.0% 17.0% 12.0% 7.0% 2.0%
Fixed Income Sectors Quarter Returns
Corp, 1.2%
US HY, 2.6%
TIPS, 0.8% MBS, 0.7%
Ex US Agg, 1.1%
Em Mkts, 1.8%
Fixed Income Sectors 1-Year Returns
Corp, 14.5%
Ex US Agg, 7.6%
US HY, 14.3%
Treasurys, 6.9%
Agency, 5.9%
TIPS, 8.4%
MBS, 6.4%
Em Mkts, 15.0%
-3.0% Treasurys, -0.8%
Agency, -0.1%
The equity bar widths depict end of the quarter region and sector weights. Fixed income bar widths do not depict specific sector weights. Sources: Sellwood Consulting LLC, Morningstar Direct
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.
Related download
- treasury yield curve percent 2 yr 10 yr treasury spread bp
- odds rise for inverted yield curve new recession
- cnbc reports 10 year treasury yield drops to 19 month low
- 2018 market outlook just markets webcast recap
- interest rate options
- fourth quarter 2019 fourth quarter 2019 the year
- the big rock an interview with jeffrey gundlach
- s p 500 plunges on yield curve inversion
- cnbc etf retirement asset class type etf ticker portfolio
Related searches
- dow jones for the year 2018
- dow for the year 2018
- dow jones for the year 2019
- student of the year watch online
- day of the year count
- teacher of the year characteristics
- 2019 school year calendar template
- 2019 paint colors of the year
- 2019 market year in review
- amazon fourth quarter results
- 2018 2019 school year calendar
- ford fourth quarter earnings